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Coronavirus Guidance for Small and medium-sized businesses

Grant for businesses that pay low or no business rates

The rules in this area differ in some regards depending on whether the property is in England, Wales, Scotland or Northern Ireland; therefore, and unless stated otherwise, the rules broadly applying in the UK are summarised below. Links are provided below to the guidance issues by the UK, Scottish and Welsh Governments and by the Northern Ireland Executive.

Broadly, a business that:

  • occupies a property in the UK; and
  • receives Small Business Rates Relief (Scotland: Small Business Bonus Scheme) or Rural Rates Relief (Scotland: Rural Relief) in respect of that property,

is entitled to a one-off grant of £10,000.

Advice on claiming the grant is as follows:

  • for properties in England, the local authority will contact the business to inform them that they are eligible for the grant. Any queries with regard to the grant should be directed to the local authority;
  • for Scotland, the business should complete an application form on the relevant local authority's website (see here);
  • for Wales, the business should confirm information online (see here); and
  • for Northern Ireland, an online portal will be set up for the business to register its details.

For businesses in the retail, hospitality and leisure sectors, the grant is increased to £25,000 in certain circumstances.

On 2 May, the UK government announced additional funding for local authorities in England to support small businesses with ongoing fixed property-related costs. The allocation of funding is at the discretion of local authorities.

The grant is a State Aid under the Framework and as such is subject to the overall cap on such aid; see here.

Government guidance: England Scotland Wales Northern Ireland

Coronavirus Business Interruption Loan Scheme (CBILS)l

A small business is able to claim finance (e.g. a loan or overdraft) through the Coronavirus Business Interruption Loan Scheme of up to £5m. The loans are 80% guaranteed by the Government and the Government will meet the cost of the first years’ interest charges and any fees imposed by the lender.

To qualify for the scheme, the business must:

  • be UK based;
  • have annual turnover of no more than £45m; and
  • satisfy the eligibility criteria set out by the British Business Bank (BBB) – see the quick reference guide and detailed guidance provided by the BBB.

The CBILS is delivered through commercial lenders. Should the business wish to apply, it should contact its lender or one of the accredited providers (see the BBB website, here).

On 3 April, the chancellor announced some changes to the Scheme intended to make it easier for companies to secure a loan. These include:

  • extending the CBILS to all small businesses affected by COVID-19, not just those unable to secure regular commercial financing;
  • preventing lenders from requesting personal guarantees for loans under £250,000; and
  • making operational changes to speed up lending approvals.

A business that is unable to access finance through the CBILS may wish to consider the Coronavirus Bounce Back Loan Scheme (CBBLS) or the Future Fund

Government guidance

Coronavirus Bounce Back Loan Scheme (CBBLS)

A small business may apply for a government-backed, low-interest loan of between £2,000 and £50,000 under the CBBLS. The CBBLS opened for applications from 4 May.

The loan, which is 100% government-backed, is arranged through one of a panel of accredited lenders. There are no fees or interest for the first 12 months and a low rate of interest for the remainder of the term. The maximum term of the loan is six years.

Only eligible businesses may apply for funding under the CBBLS. A business is an eligible business where it satisfies all of the following conditions:

  • it is based in the UK;
  • it has been negatively affected by COVID-19;
  • it is not an excluded business. Excluded businesses are:
    • banks, insurers and reinsurers (but not insurance brokers);
    • public-sector bodies; and
    • state-funded primary and secondary schools; and
  • it is not already claiming funding under the CBILS (above). It is possible to transfer a loan of £50,000 or less from the CBILS to the CBBLS.
A number of changes have been made to the CBBLS since it was first announced, including that:
  • it is no longer a condition of the scheme that the business was not an ‘undertaking in difficulty’ on 31 December 2019; and
  • granted-funded further education establishments are now able to make a claim.

Government guidance

Letter from the Chancellor to the accredited lenders

Content last updated 14 April 2020

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