20 March 2020
Support and advice for businesses that are experiencing cashflow problems as a result of COVID-19
The COVID-19 pandemic has affected business activity and created uncertainty for many businesses.
Business activities will be disrupted for some time depending on your sector, and as a result, businesses may experience cashflow issues. Here are practical actions which you can take now:
- Work out the extent of the pressure – based on the estimated impact of lost sales and other disruption, how much additional borrowing are you likely to need? See manage your cashflow.
- Create a business plan that shows how the business will trade its way back to a healthy position. Consider any actions you could take with respect to staff such as flexible working, reduced opening hours or short-time working.
- Once you have an idea of how much additional money you will need, call your existing finance provider – a bank or another lender. The sooner you approach them the better. If you have an existing loan or asset purchase (for example a lease or HP agreement), you could ask for a repayment holiday. You may also need a new or increased overdraft facility. The better your business plan, the more likely you are to be successful. See borrowing finance for your business.
- Talk to your customers, especially large customers, and ask if they can pay your invoices more quickly. See ensure customers pay you on time.
Support for businesses
Business support Grant Schemes
A grant of £10,000 is to be made available to all small businesses who are eligible for the Small Business Rate Relief. Another grant of £25,000 is to be provided to companies in the hospitality, tourism and retail sectors with a rateable value from £15,000 up to £51,000. See Coronavirus: Business Support Grant Schemes.
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme will enable businesses to apply for a loan of up to £5 million, with the government covering up to 80% of any losses with no fees.
Businesses can access the first 12 months of that finance interest-free. The government will cover the first 12 months of interest payments.
Check if your lender offers the scheme - there is a list of lenders on the British Business Bank website. The scheme will launch on Monday 23 March 2020.
For further information, download the Coronavirus Business Interruption Loan Scheme FAQs for SMEs (PDF, 224K).
Support from lenders
Many lenders are now offering support to assist with cashflow. If you do not meet your existing lender’s criteria, shop around. If you cannot find a suitable lender, there are three online finance platforms designated by Government that can help you find suitable providers.
HMRC’s coronavirus helpline
Call HMRC’s dedicated helpline on 0800 024 1222 to find out if are eligible to defer making PAYE and VAT payments.
First published 20 March 2020