Businesses on the Wirral negatively affected by coronavirus can access a range of supportive measures introduced by the government. Help to pay staff wages, support for self-employed incomes, and government-backed loans, are part of a vast programme of state assistance that is helping businesses through these testing times.
So what support is available for eligible businesses on the Wirral and the wider Merseyside area?
Help for employers
The Coronavirus Job Retention Scheme (CJRS) helps businesses to retain staff and offers a viable alternative to redundancy. The scheme places employees on ‘furlough,’ which means they take a temporary leave of absence and cannot carry out work for their employer.
The scheme pays 80% of their wages up to a maximum of £2,500 per employee per month, plus the associated costs of employment – Employer National Insurance and pension contributions.
CJRS will remain in its current form until the end of July 2020, but the format is set to change from August until the scheme finishes at the end of October 2020, although details of the changes are not yet known.
Emergency funding for Wirral businesses
Two government backed loan schemes may provide the emergency funding needed to help SMEs on the Wirral survive the negative effects of coronavirus.
Coronavirus Business Interruption Loan Scheme (CBILS)
CBILS is designed to support business cash flow, and 80% of each loan is backed by the government. Various types of funding are available through CBILS, including bank loans, invoice finance, bank overdrafts, and asset finance.
Eligible businesses with an annual turnover of up to £45 million can access loans of up to £5 million, which are interest-free for 12 months. Loan terms are up to three years for invoice finance and bank overdrafts, and up to six years for bank loans and asset finance.
Bounce Back Loan Scheme (BBLS)
Smaller businesses may find the Bounce Back Loan Scheme more appropriate for their needs than CBILS, as no repayments are required for 12 months. The scheme offers loans of up to 25% of annual turnover, capped at £50,000, and these are fully guaranteed by the government.
Support for self-employed incomes on the Wirral
The Self-Employed Income Support Scheme (SEISS) is designed to help self-employed people in the Wirral area and nationwide, to deal with the devastating financial impact of COVID-19. The government is offering a taxable grant based on 80% of average monthly trading profits over three tax years – 2016/17, 2017/18, and 2018/19.
This amount is capped at £7,500. Self-employed business owners can check if they are eligible for SEISS on the gov.uk website, and if so, HMRC will contact them with a specific date to apply.
Professional insolvency advice
If businesses decline to the point of insolvency, professional advice is crucial to avoid liquidation and closure. There may be still be options available at this point that can protect businesses from legal action, such as company administration or a formal restructuring of debt within a Company Voluntary Arrangement (CVA).
- When a company enters administration, an eight-week moratorium period is triggered that allows the administrator to make future plans for the business.
- Alternatively, if the company is deemed viable for the long-term, official renegotiation of debt repayments within a formal agreement (Company Voluntary Arrangement) can allow company directors to trade their way out of difficulty.
If you would like to discuss the problems your business is experiencing due to coronavirus, you can arrange a free consultation with partner, Keith Tully, at your local Real Business Rescue office in Liverpool city centre, covering the Merseyside region.