What’s available in the £1bn support package for businesses?

1. £6,000 grants for hospitality businesses

One-off grants of up to £6,000 per premises are available for hospitality and leisure businesses in England. 

The festive period is usually the most lucrative for pubs and restaurants, however many have faced cancellations and decreased footfall since the Omicron wave began. 

According to Hospitality UK, lots of hospitality firms lost 40-60% of their December trade. 

On the positive side, hospitality business insolvencies are 25% lower than they were pre-pandemic, which highlights the importance of financial support packages.

The new grants will be administered by local authorities over the coming weeks, and approximately 200,000 businesses will be eligible. 

2. £100 million for local authorities to distribute 

It’s not just pubs and restaurants that have faced unprecedented challenges this Christmas time. Other businesses, including suppliers, are also struggling. 

To ease the financial pressure, the government is providing over £100 million to the Additional Restrictions Grant (ARG) fund for local authorities in England.

Local authorities will allocate funding through the ARG to businesses that need it most, and the authorities that have allocated the majority of their current allocation will be prioritised.

3. The statutory Sick Pay Rebate Scheme (SSPRS) returns

Since 21 December, SMEs have once again been eligible for the Statutory Sick Pay Rebate Scheme (SSPRS), and they will be able to make retrospective claims from mid-January. 

The SSPRS  ensures firms with fewer than 250 staff are reimbursed for the cost of Statutory Sick Pay for Covid-related absences (for up to two weeks per employee). 

This support will help bolster businesses that are being impacted by workers having to take time off work due to the pandemic.

4. £30 million through the Culture Recovery Fund 

The arts and culture industry is also facing huge hurdles this winter. The government is supplementing the Culture Recovery Fund with a further £30 million of funding and grants will be available for organisations like theatres, museums and orchestras until March 2022. 

5. £150 million for devolved administrations

The UK’s devolved administrations will receive £150 million to enable them to support businesses in Scotland, Wales and Northern Ireland. 

£80 million has been pledged to the Scottish Government, with the Welsh Government receiving £50 million and Northern Ireland receiving £25 million.

This is part of £860 million of further funding announced by the UK Government in December 2021 to support the UK’s devolved administrations.

A recap of existing support measures for businesses

These recent measures, in addition to existing ones, will help businesses across the UK navigate the challenges they face during the winter months. 

Hospitality and leisure firms’ business rates bills have been reduced by 75% this financial year, and a 50% capped business rates relief measure will come into play next financial year. Meanwhile, the £1.5 billion Covid Additional Relief Fund is helping businesses that have not previously had business rates support.

Until the end of March 2022, hospitality and tourism businesses are eligible for a 12.5% VAT reduction to help boost cash flow and support viability. Aviation and travel firms can leverage the Airport and Ground Operations Support Scheme (AGOSS) until the end of March.

Businesses that are unable to pay rent on their premises are protected from eviction according to a moratorium in place until March 2022.

Chancellor Rishi Sunak has asked HMRC to provide hospitality and leisure firms in particular the option to leverage the Time to Pay tax arrangement. 

The Recovery Loan Scheme (RLS)

Businesses experiencing disruption due to the Covid-19 pandemic have until 30 June 2022 to apply for additional finance through the Recovery Loan Scheme. 

The scheme was originally due to finish at the end of 2021, however, the government decided to extend it in the Autumn budget. 

As of January, the maximum amount of finance available to businesses through the scheme will drop from £10 million per company to £2 million per company. The government will also lower its guarantee from 80% to 70% and only SMEs can access the scheme.

Businesses can apply for RLS finance using Funding Options.

Finance is available through a range of accredited lenders and comes in the form of a term loan, asset finance, invoice finance or a business overdraft. 

It’s important to remember that the RLS isn’t the only option for businesses right now. 

You can use Funding Options to explore a variety of business finance types, from property finance and bridging loans to merchant cash advances and more.