Today, more than ever before, businesses across the UK need as much help as they can get to survive the coronavirus crisis. Business owners are being urged to look into the government grants that are available, including additional funding due to the pandemic.
Taking up the funding they’re entitled to will not only help businesses in all sectors to keep afloat, it will also enable them to make important refurbishments to their premises, giving them a head start when it comes to bouncing back after the pandemic ends.
© D Russell 78 / Adobe Stock
Small businesses in crisis
The UK has around 5.94 million small and medium-sized businesses and many are crying out for help as a result of the current crisis. Sadly, around 25% have closed down since April 2020 due to the two lockdowns, according to the latest research from Statista.
Some of them plan to reopen, although others may be closed for good, which is a blow for the 16.8 million people employed in the sector. The need for grant aid to prevent as many permanent closures as possible has never been greater.
A survey carried out by Simply Business found the Covid-19 pandemic had cost the average UK small business around £11,000, with some areas affected more severely than others. The proportion of UK businesses still trading has fallen to 82%, compared with the number operating before the pandemic, according to a new report released on 19th November by the Office for National Statistics.
What help is available?
The Prince’s Trust Enterprise Programme works with 18 to 30-year-olds to help them develop their business, including building your company once it’s up and running. There is no “business grant” as such but business owners can apply for funding to help their enterprise to grow.
The European Regional Development Fund has been extended, in the event of a no-deal Brexit, to finance many grants to guarantee multiple projects in the UK can be finished. The UK left the EU on 31st January 2020 and the transition period put in place will end on 31st December 2020.
While this would have meant an immediate end to grants from the ERDF, the government negotiated a deal in 2018 to ensure the funding will remain in place for all projects commenced in 2020. Hurry up, the clock is ticking!
Local authorities have received central government funding to distribute among SMEs in England during the coronavirus crisis. Data compiled on 11th November showed £11.6 billion had been paid out, equating to 95% of the available funding.
The Seed Enterprise Investment Scheme helps startups to raise money to improve their business, up to a maximum of £150,000. Various conditions must be met so investors can claim and keep SEIS tax relief in relation to their shares.
In addition, the government has launched its coronavirus Bounce Back Loan Scheme to enable small businesses to access financial aid faster during the Covid-19 crisis. The scheme allows small and medium-sized businesses to take out a loan of between £2,000 and up to one-quarter of their turnover, to a maximum of £50,000.
The government guarantees 100% of the loan, while there are no fees or interest to pay for the first 12 months – the interest rate will be 2.5% a year after the first 12 months. Applications can be made up to 31st January 2021.
The Coronavirus Business Interruption Loan Scheme offers financial aid to small and medium businesses affected by Covid-19. Business owners can access loans and other financial aid up to £5 million. The government will guarantee 80% of the finance to the lender and will pay interest and any fees for the first 12 months. Apply to join the scheme before 31st January 2021.
Making good use of funding
The extra funding can be put to good use and relieve the financial stress of trying to maintain your business during the pandemic. You can make improvements to your business after the lockdown ends, without the financial headaches.
According to statistics compiled by Bedfordshire Chamber of Commerce, 76% of traders have suffered a reduction in sales of their products or services, as a result of the pandemic. Despite bricks and mortar stores setting up or increasing their online presence, and restaurants turning into takeaways, it has been an uphill struggle.
The first thing to do is to review your losses in 2020, comparing the figures with cash flow statements from 2019. Next, you should consider going back to basics, determining how you can adapt to stay relevant in a post-pandemic climate.
One of the biggest challenges will be attracting customers back to high street stores, as many will have become accustomed to shopping online. Last year, 1.92 billion consumers worldwide shopped online regularly. Since the pandemic began in March 2020, the number has risen to 2.05 billion, according to research by Statista.
In the UK, as many as 87% of consumers are shopping online. This is the highest percentage of online purchasing in the past 11 years, with sporting goods and clothes being the biggest sectors – reflecting people’s determination to keep fit while spending more time at home with the gyms shut down.
Attracting consumers to the high street
The challenge for high street traders will be getting them back into the shops! After almost a full year of disruption since the first lockdown began in March, many business owners will not have been able to spend any money on keeping their premises in good condition.
One way of attracting customers back is to spend some of the available grant aid on a quick refurbishment. While no-one can afford to completely refit their shop, spending money carefully in line with the “new normal” and safe shopping practices can make all the difference.
Kill two birds with one stone by refurbishing your store entrance. Automatic doors will not only make your premises look more inviting and contemporary, but they will also prevent unnecessary queues and stop bottlenecks from forming in doorways, while maintaining a more energy efficient environment – which, in turn, will provide long term savings on your energy bills.
It’s also worth installing a Covid-19 queue management system at your store entrance. A “traffic light system” automatically integrates with the automatic doors to control the number of people who can enter a building at any one time. Also known as the FlowControl system, it effectively enables customers to practice social distancing, without employees having to intervene.
Benefits to the economy
Speaking just before the current lockdown, Chancellor of the Exchequer Rishi Sunak said the extra financial support for businesses would help more people to hang on to their jobs and aid the UK’s economic recovery in general.
He said the government must be ready to adapt its financial support as the situation evolved, in order to reach more people and protect jobs. He described the government’s “stepped-up support” as being part of the country’s “pulling together” over the coming months.