Small businesses have been some of the worst hit by the coronavirus outbreak with many having to close their doors for the foreseeable future. Despite many manufacturing firms remaining open for business; the sector is having to deal with its own set of challenges. From supply chain struggles to staff sickness and self-isolation, the impact of this global health crisis has also gripped one of the UK’s largest and most important industries.
Government guidance, advice and legislation is changing daily, and because of this, many manufacturers are confused about what support is available to them. Here, we’ve outlined some of the most recent updates that are most relevant to manufacturers in the UK.
Coronavirus Business Interruption Loan Scheme updated
Last week, the Chancellor Rishi Sunak announced that he would be taking further action to support firms affected by the coronavirus crisis by bolstering business interruption loans for small businesses.
The Coronavirus Business Interruption Loan Scheme is a temporary loan delivered by the British Business Bank to support SMEs, including manufacturers, that are losing revenue, and seeing their businesses disrupted as a result of COVID-19. The government will also be covering the first 12-months of interest and fees on these loans.
Following early criticism of the scheme, and with reports that many businesses were unable to access the funding they need, the Chancellor has taken steps to revise the eligibility criteria. This included extending the scheme to ensure that all viable small businesses, and not just those unable to secure regular commercial financing, will now be eligible for the scheme. The government also announced it would stop lenders from requesting personal guarantees for loans under £250,000 and would work to speed up lending approvals. Full details of the scheme are available on the British Business Bank website.
Coronavirus support grant for small businesses
SME manufacturing businesses have been calling for the government to reassess the support currently available to them, including a possible extension to the Small Business Grant Fund to include the UK’s small manufacturers. A £10,000 grant is currently only available to retail, hospitality and leisure businesses that qualify for small business rates relief, meaning the business must operate from premises with a rateable value of less than £15,000.
However, there is currently no such grant that would provide support to manufacturing businesses and although there is little talk of amending this scheme at present, with an increasing number of SME manufacturers facing financial challenges and industry bodies like Make UK lobbying for a review, it will be interesting to see if the government responds over the coming weeks.
Current support available to manufacturers
The UK government has introduced a number of key measures to support SMEs in coping with the widespread disruption caused by COVID-19. These measures are being updated and amended regularly and therefore it’s vital to continue checking the government website to ensure that your business remains up to date with the latest legislation.
The measures currently available to UK manufacturers include –
• The Coronavirus Job Retention Scheme – this allows companies to claim for 80% of furloughed employees’ usual monthly wage costs. This measure was put in place to help prevent businesses having to made employees redundant.
• Statutory Sick Pay Rebate – The Government has announced legislation to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for staff sickness absence due to coronavirus.
• The Coronavirus Business Interruption Loan Scheme – As mentioned above, this scheme aims to provide much-needed cash-flow to viable businesses.
• HMRC Time to pay – All businesses in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax payments through the HMRC’s Time to pay service.
For all the latest information on Covid-19 and the measures the Government, and Devolved Governments, are taking please visit the UK Government website, the Scottish Government website, the Welsh Government website or the Northern Irish Government website.