COVID-19 SUPPORT: Daily Update – Friday 17 April 2020

COVID-19 SUPPORT: Daily Update – Friday 17 April 2020

Key Contact: Christian Farrow

Author: Elena Visser

Chancellor Rishi Sunak expands loan scheme for large businesses

Rishi Sunak has revealed the final details of the Coronavirus Large Business Interruption Scheme (CLBIS) ahead of its launch on Monday. All viable businesses with a turnover of more than £45 million will be able to apply for the support. Firms with a turnover of more than £250 million can borrow up to £50 million from lenders.

Businesses with a turnover of more than £500 million were originally not eligible for the scheme which is being set up to help firms who do not qualify for the existing Coronavirus Business Interruption Loan Scheme for small and medium businesses, and the Bank of England’s Covid Corporate Financing Facility for investment grade companies.

Rishi Sunak said that he wanted to ensure that no viable business slips through the safety net of support as they help protect jobs and the economy which is why they have decided to expand the generous scheme for larger firms.

The government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance.

Further details about the Chancellor’s announcement can be found here.

Applications now open for the Welsh government’s £500 million Economic Resilience Fund

Applications can now be made for the second phase of the Economic Resilience Fund which is worth £200 million. More than 120 Welsh government and business contract staff have been diverted onto processing the many applications that are expected, in order to ensure that the money reaches businesses as soon as possible.

The fund has been designed to address gaps not currently met by schemes already announced by the UK government, Welsh government, and the Development Bank of Wales.

For microbusinesses, including start-ups employing up to nine employees, they may qualify for the funding if they:

  • have experienced in excess of a 40% reduction in turnover since 1 March 2020;
  • can demonstrate that efforts have been made to sustain business activity;
  • are not pursuing other forms of Welsh government non-repayable grant funding support; and
  • are not entitled to the business rate relief grant.

For small and medium sized firms with between 10 and 249 employees, they may qualify for the funding if they:

  • have experienced in excess of a 60% reduction in turnover since 1 March 2020;
  • are not eligible for business rate relief grants, or if they are, that amount would be deducted from their allocation from the fund;
  • have a sustainable business plan to trade beyond the pandemic;
  • confirm that no future compulsory redundancies will be made; and
  • are not pursuing any other form of Welsh government non-repayable grant funding support.

Applications can be made through the Business Wales website which can be found here.

Companies House support for businesses dealing with the coronavirus outbreak

Changes were announced yesterday to help businesses avoid being struck off the Companies House register as a result of coronavirus related delays.

Companies House is to temporarily pause the strike off process to prevent companies being dissolved. This will give businesses affected by the outbreak the time they need to update their records and help them avoid being struck off the register. In addition, companies issued with a late filing penalty due to covid-19 will have appeals treated sympathetically.

Yesterday’s announcement builds on measures already implemented by the Secretary of State for Business, Energy and Industrial Strategy, which involves giving businesses the ability to apply for a three-month extension to file accounts with Companies House. Alok Sharma also announced that he will monitor whether any further extensions will be needed in due course.

Further information about the new measures can be found here.

Please see our daily updated Financial Support Guide for Businesses for further information-  COVID-19 FINANCIAL SUPPORT FOR BUSINESSES

For more information on any of the points raised, please contact our corporate team.

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