How can you protect your business?

The Coronavirus is frightening enough for us all as individuals, but many businesses are also at risk from the symptoms. Most are experiencing a severe downturn and many, from pubs and restaurants to small manufacturers have been forced to shut their doors.

If you run a business, there will be bills that need to be paid, and if your business is small you may not have the cash reserves to handle them yourself. To survive, your business will need an income.

The position is changing fast, but at Continuum we have drawn up a basic guide to government support that is currently available.

Wages to pay?

Your wages bill is probably one of the largest costs you face. The Coronavirus Job Retention Scheme  – CJRS -is designed to protect the jobs of workers who are furloughed during the crisis. With the scheme, the government will pay 80% of their usual monthly gross pay up to a maximum of £2500 per employee per calendar month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay. The scheme is in place, for three months, although extending the scheme has not been ruled out.  It is up to you whether you pay the remaining 20% to your workers.

For your staff to qualify, you must classify them as a ‘furloughed worker’, and notify HMRC through a portal, currently still under development.

When on furlough, an employee cannot undertake work for, or on behalf of, the organisation or any linked or associated organisation. This includes providing services or generating revenue.

You will be able to apply for the funds as soon as the service is ready and backdate your claim to the beginning of March.

Further details are to be released.

Sole trader?

If you are sole trader, you could be eligible for support under the Coronavirus job retention scheme. Owner-managed businesses can make a claim from the CJRS. You will in effect, be furloughing yourself. The current understanding is that you can do no income generating work for your business but can continue to run it from a statutory perspective.

Again, further details are to be released.

Small business?

If your business currently qualifies for Small Business Rate Relief (SBRR), a grant of £10,000 will be paid automatically by the local council. Your local authority is scheduled to contact you soon with the details of what you are entitled to.

If you have any questions about whether you will qualify, you should contact your local authority. You should find details of their preparations for SBRR on their website, and there should be someone at the council who can help you over the phone.

Retailer?

Retail businesses are particularly vulnerable in the current crisis. These are not simply shops, but restaurants, cafés, drinking establishments, cinemas and live music venues – essentially any business which depends on the presence of customers.

The lockdown means that those customers simply cannot come in. This would usually spell disaster for retailers already suffering as customers desert the high street for the internet.

If your retail business has a rateable value between £15,000 and £51,000, the grant could rise to £25,000. Your local authority should be in touch in the next few weeks with further details.

The Coronavirus Business Interruption Loan Scheme – CBILS.

The Coronavirus Business Interruption Loan Scheme (CBILS) provides government guarantees for commercial loans of up to £5 million.

These will be interest free for 12 months, with the government promising to underwrite 80% of the loan should a business fail, which could make lenders more ready to lend. If your business was successful before the crisis, it could provide the funding you need to work through it.

You can apply to lenders directly.

Getting help

The government’s funding schemes could provide a lifeline to many businesses. But in a crisis, you may need additional help.

At Continuum we are standing by to provide the support you need to help your business survive. We can help advise on the measures listed for your small business and look at other ways of potentially raising funds and refinancing.

We can work via video link – ensuring that you can still have personal service to answer your financial questions.

The Continuum adviser team and their expertise is ready to help you.  Call us today.

The information contained in this article is based on Continuum’s understanding of current UK Government guidance and does not constitute financial advice or a recommendation to suitable investment strategy. You should seek independent financial advice before embarking on any course of action