The Chancellor of the Exchequer Rishi Sunak has just announced the second stage of the UK Government’s financial support for both businesses and individuals . This extends the support first announced in last week’s Budget.
Here are the key measures relevant to businesses across the UK:-
- Confirmation that the guarantees the Government previously proposed on business loans will now be uncapped. Initially the total sum of the guarantees to be provided will be £330bn, but the Chancellor will be extending this over the next few days – in his words “Whatever it takes”.
- For larger companies, the Government has agreed with the Governor of the Bank of England that more commercial loans will be available, on “attractive terms”. We are sure these terms will be based on individual circumstances, though the Government have confirmed that their aim is to ensure funds are released as quickly as possible to improve business liquidity.
- For SMEs (Small and Medium-sized Enterprises), there will be loans of up to £5m per business available, with no interest payable for the first 6 months. The necessary legislation and procedures are to be set up over the next few days, and the hope is that these will be up and running by next week. If you require assistance in the interim period, the advice is to approach your Local Authority to discuss whether they may be able to assist.
- The Government is putting together a separate support package for airlines and airports, and potentially other transport firms, and will release details as the week goes on.
- For any smaller businesses in the Hospitality, Leisure and Retail sectors who do not have Business Interruption Insurance, the Government has agreed to provide grants of up to £25,000 per business to bridge the gap. These will be made on a sliding scale based on rateable value.
- Companies in premises with a rateable value of £12,000 or less are now able to claim a grant of up to £10,000, increased from £3,000 announced in the Budget. Again these grants will be on a sliding scale based on rateable value.
- In an effort to help struggling staff who may have to survive on SSP, banks have agreed with the Government that they will provide mortgage holidays of at least 3 months to all those who have been affected by COVID-19. At this early stage it is quite vague as to who will qualify, and the advice is that you should speak to your bank if you are facing financial hardship and they will seek to be as flexible as they can be at present.
Finally, the Chancellor has said that he will be working with Trade Unions and business leaders to produce a more comprehensive employment support package over the next few days. We believe the intention will be to go further still in supporting both businesses and staff. We will keep you updated on developments as they occur, but in the meantime we are here to help if you have any questions or need assistance with any legal issues in your business.
The Backhouse Solicitors Team
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