Coronavirus small business advice
If coronavirus is impacting trading, you might consider our finance and risk reduction advice...
It is clear by now that coronavirus is the biggest threat to businesses of every size around the world. At Startups, we have been covering the effects of the pandemic on businesses, along with the steps being taken by the UK government to deal with it.
In this article, we will be summarising some of the key advice for small businesses, and also providing further reading material.
Coronavirus financial support
The UK government has introduced a number of initiatives for business. Ranging from loans to grants, these steps have been taken to reduce the risk to both businesses and the staff they employ.
In this section, we have provided a little more information about the measures announced so far.
Coronavirus Business Grant
The UK government’s coronavirus business grant was first announced as part of the budget at the beginning of March. As the scale of the crisis became clear, the amount offered was raised from £3,000 to £10,000.
Eligibility for the grant is determined by several factors:
- Your business must have a premises
- Your business must be in England
- Your business must be eligible for small business rate relief (SBRR) or rural rate relief
The grant scheme is being overseen by local authorities, who will contact eligible businesses in due course. Funding for the scheme will be available in early April.
Find out more here: How can my small business get the £10,000 coronavirus grant
We have also provided more detail on the support available for Wales, Scotland and Northern Ireland.
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme offers businesses a government-backed loan of up to £5m, which will be interest free for 12 months. Any business taking this option will be entirely responsible for repaying the finance lended.
There are different options available, including term loans, overdrafts, asset finance, and invoice finance. The scheme will be delivered through over 40 UK lenders, and the government has given a guarantee for 80% of the loan to mitigate the risks of lending.
The loan scheme is available to UK businesses with an annual turnover of up to £45m. This can be applied for in the same way that you would apply for other loans, either online or over the phone.
Find out more here: How to apply for the coronavirus loan
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is a government grant that will cover 80% of employee salary, up to £2,500 per month, per employee.
The government guidance is that all UK businesses that pay staff through PAYE are eligible for the scheme. However, the key element is that staff must be furloughed to be eligible – this means that they cannot do any work, and must officially have their employment status changed.
Find our more here: How to apply for the Coronavirus Employee Retention Scheme
Coronavirus Statutory Sick Pay (SSP)
The coronavirus statutory sick pay refund scheme is designed for small and medium-sized businesses with up to 250 employees as of 28 February 2020. The refund has been created in line with the government’s self-isolation guidelines, with SSP repaid for a maximum of 14 days.
At the moment, SSP is worth £94.25 per week, per employee.
Find out more here: How to apply for a Coronavirus Statutory Sick Pay refund
Coronavirus Future Fund
Launching in May 2020, the scheme offers convertible loans of between £125,000 and £5m to ‘innovative’ companies facing difficulty.
The government says the Future Fund has been designed for companies that rely on equity investment and that are unable to access the Coronavirus Business Interruption Loan.
Find out more here: How to apply for the Coronavirus Future Fund.
The Retail, Hospitality, and Leisure Grant Fund
Targeted specifically at businesses in the retail, hospitality and leisure sector, this scheme offers grants of:
- £10,000 to businesses with property that has a rateable value of up to and including £15,000
- £25,000 to businesses with property that has a rateable value of over £15,000 and less than £51,000
Find out more: How to apply for the Retail, Hospitality, and Leisure Grant Fund.
The Bounce Back Loan
The Bounce Back Loan has been created to help small businesses access finance more quickly during the Coronavirus outbreak.
It enables small and medium-sized businesses to secure finance equating to 25% of their turnover.
Eligible businesses can receive a minimum of £2,000, and a maximum of £50,000.
Find out more: How to apply for the Coronavirus Bounce Back Loan.
Other financial support
The UK government has also announced several other measures:
- VAT holiday – the next quarter of VAT payments will be deferred, meaning no UK business will be required to pay VAT until mid-June. However, all businesses will be required to pay those bills by the end of the financial year (March 2021).
- HMRC Time To Pay Scheme – small and medium-sized businesses who cannot afford to pay their tax bills can ask HMRC for a Time to Pay agreement to suspend debt collections. This will be available for all businesses and self-employed people who are struggling with their finances. These cases will be assessed on a case by case basis by HMRC.
Find out more about these initiatives on iwoca’s How to access business finance during the coronavirus crisis page.
Advice for working from home
The measures being introduced in the UK to tackle the coronavirus pandemic have impacted every business.
Of these measures, the forced move to remote working for businesses able to do so is especially prominent, as is the lockdown of businesses not in the ‘essential’ category.
If your business is remote working and you need advice, continue reading; if your business is one of those forced to stop operation, you might find the next section on ‘Pivoting business strategy’ useful.
How to work from home
Remote working has grown in popularity in recent years, though it may still be a new concept for many people.
Working from home doesn’t have to disrupt daily operations, though it does offer unique challenges that employers and staff should bear in mind.
Visit our Tips for working home page if you want more comprehensive information.
Keep your wellbeing in mind – Taking care of yourself can be done in many different ways. Eating well and drinking water are obvious steps toward a healthy body, but you should also consider your mental health. Apps like Headspace are on hand to offer guided support, but there are also a range of services available from charities like Samaritans.
Many businesses also offer paid-for mental health services to staff – ask your business if there’s anything on hand to help.
Set up your workspace – Ideally your workspace would be separate from the rest of your living space, with the right equipment – but that isn’t always possible.
If you don’t have enough space, then pay attention to how you do work: set up a space as best you can, but also remember to stay to your normal schedule as much as possible. It’s all too easy to roll out of bed at 7am and start working right away until the evening, but it isn’t going to be healthy in the long-term.
Government guidelines are currently only permitting limited time for leaving the house, but this can be an excellent opportunity to switch off after a day of work and prepare for your evening.
Communicate – Thanks to Google Hangouts, Slack, and other communication platforms, working remotely doesn’t have to mean a total shut-down in communication. Working in isolation can be difficult, so regular catch-ups with colleagues or your manager can be incredibly helpful. Even if you work best alone and like your own space, it isn’t likely that you want that 24/7, so keep your communication channels open.
Pivoting business strategy
The move to lock down the UK and close non-essential businesses that cannot operate remotely has left many employers and employees without work for the foreseeable future. This measure is particularly tough for the retail and hospitality industries, which rely on face to face interaction with customers.
If your business has a plan in place for crisis situations, then you may already be following that; if you don’t, then you may want to read our guide on How to create a business continuity plan for advice.
How can businesses pivot their strategy?
There isn’t one simple answer to this question – rather, there are a number of factors and considerations that will impact the options open to you.
The most important thing for your business is to ensure that you are abiding by government measures to keep your business secure. From that point on, consider how you can continue operations – it may be better to focus all of our attention on small or trivial tasks that you know you can do, rather than worrying about the larger things that you cannot work out right now.
This step has already been taken by a huge number of businesses across the country, and the rest of the world too.
Restaurants, cafes, bars, and retailers have all used this crisis to enable parts of their business online. Right now, services like Deliveroo and UberEats are still live, meaning that restaurants and bars could maintain at least some business in lieu of welcoming patrons through the door. Retail stores can also take the same approach, and build a website that allows them to continue some normal operations.
If you’re unsure of how to start this process, take a look at our guide on How to move your business online.
If you do choose to take the steps above, it is important to recognise that it can be difficult, especially in the beginning, to gain momentum. Even if you do decide to take these steps and build a site, we advise you to consider the third-party options, including Deliveroo and similar for hospitality, and platforms like Etsy and Amazon for retail.
Going cashless is a valuable option for any business, regardless of whether or not they are currently operating as normal.
It has been suggested that handling cash can contribute to the spread of coronavirus. Moving to a cashless system can help to significantly lower this risk, while also offering a huge number of benefits in the longer-term too.
Find out what you need to do with our article on going cashless.
Businesses that cannot pivot their strategy
If the government guidelines have resulted in a complete stop of business, and if you are unable to take advantage of the ideas listed above, it is important to consider what options are available to you.
It remains to be seen how long the current crisis will continue, and the unfortunate reality is that a number of businesses could be faced with difficult decisions in the coming months. Our advice is that those businesses learn about – and take advantage of – the relevant financial measures that are being offered.