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Coronavirus: What help is available for small businesses?

11th May 2020

The coronavirus pandemic has caused significant economic pressure for many businesses. Among those that have felt the effects of the lockdown most acutely are smaller organisations. With fewer resources and reserves than larger companies, SMEs of almost every sector have seen their normal operations pause, decrease, or change substantially. 

To help them through this difficult time, however, there are a number of government-backed schemes that they can access. Here’s our rundown of the assistance available to small businesses.


Coronavirus Job Retention Scheme 


This scheme is intended to protect the jobs of employees who would otherwise be laid off as a result of coronavirus. The government has agreed to cover up to 80% of an employee’s salary up to the value of £2,500, including national insurance and pension contributions. Whilst an employee is ‘furloughed’, the employer will continue to pay them and claim back wages through the job retention scheme. As it stands, this scheme is set to run until the end of June 2020, but could be extended if the government deems it necessary. 



Given the scale of the problems faced by UK business, the eligibility criteria for the coronavirus job retention scheme are basic. Eligible companies must: 

  • Have a PAYE payroll scheme, created on or before 19 March 
  • Be enrolled for PAYE online 
  • Have a UK bank account 


How to apply 

All applications are made via the government’s dedicated online portal. The process is straightforward, requiring you to input the details of the individual employees you wish to furlough, the period of the claim, and relevant tax details (i.e corporation tax reference, company registration number, self assessment reference). Once your claim has been received, it will be processed and payment will be received in your company’s account within 6 workings days. 


Business Interruption Loan Scheme 


This scheme is specifically designed to ease cash flow problems for SMEs. It allows them to access loans of up to £5 million with a maximum repayment term of 6 years. Term loans and asset finance facilities can be spread over 6 years, whilst overdrafts and invoice finance facilities are capped at three years. The first 12 months of interest on the loan and any lender fees will be paid by the government. 



To be able to apply for the loan scheme, a business must: 

  • Be based in the UK 
  • Have annual turnover of less than £45 million 
  • Self-certify that is has been adversely affected by COVID-19 
  • Not have been classed as a ‘business in difficulty’ on 31 December (if borrowing more than £30,000)


How to apply 

Those looking to secure a business interruption loan should apply through an accredited lender (of which there are 40). You will be asked to confirm how much you would like to borrow and the period of the loan. The lender will also request a number of supporting documents, including: 

  • Business Plan 
  • Historic accounts 
  • Management accounts 
  • Details of assets 

The process time for your application depends on the lender and the specifics of your claim. 


Bounce Back Loan 


This government-backed loan is similar to the Business Interruption Loan, but has lower limits and requires less supporting documentation. It allows businesses to access up to £50,000 in loans with a maximum repayment period of 6 years. The government will pay any interest on the loan for the first 12 months of the term. After this period, interest is capped at 2.5%. Early repayment is also permitted under this scheme, with no extra costs attached. 



Any company applying for a bounce bank loan must self-certify that: 

  • It was not classed as a ‘business in difficulty’ at 30/12/2019 
  • It is not also in application for a Business Interruption Loan 
  • It is not in bankruptcy or in the process of liquidation 
  • It does not derive more than 50% of its income from trading activity 
  • It operates in the UK (in either trading or commercial activity), and had commenced by 1 March 2020. 
  • It is not classed as a credit institution, insurance company, public sector organisation, or state-funded school.


How to apply 

All applications are made through accredited lenders. We’d recommend approaching your existing lender (ideally through their website) as this may speed up the process. The application itself consists of filling out a short form online which asks for basic details about your business and the requirements of the loan. Once submitted, the application is processed and, if successful, loan amounts are received within a matter of days. 

Small businesses are facing a host of new challenges during the current pandemic. With operations temporarily suspended or reduced, income for many smaller organisations has dropped and caused significant financial pressure. To help them through this difficult period, the government has launched a number of initiatives to keep them afloat and ensure they’re in as healthy a position as possible once normal trading conditions have resumed. 


As always, we’d recommend small business owners get in contact with a financial advisor to explore their options and find the best way to navigate through these difficult times. 


Based in South-West London, IMC Financial Services has been helping small businesses manage their finances for over 20 years. Whatever difficulties you’re currently facing, our expert financial advisors are on-hand to help – get in touch to see how.


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