Almost 70,000 SMEs Risk Missing Out On Government Coronavirus Grants

It has come to our attention that a massive 69,543 of eligible SMEs in England have yet to claim for the government Coronavirus grants announced back in March! Unfortunately, that is bound to include a few of you, who could definitely benefit from these grants.

With the deadline for grant applications fast approaching, it is imperative that businesses that need support and are yet to claim, assess their financial situation and if needed submit their claim urgently. While there has been much confusion in the past with regards to eligibility, now is the last opportunity for businesses to find out if they are eligible and how much funding they could apply for.

Until earlier this month, an SME was classed as an ‘undertaking in difficulty’ if by deducting accumulated losses from its reserves it was left with a negative amount greater than half of its subscribed share capital, as at December 2019. Any SME classified in this way was barred from accessing CBILS, although SMEs less than three years old were exempt from this rule. The rule was untenable as it left many good businesses, which regular banks would usually have helped based on their own lending criteria, unable to access much-needed funds.

The amendment means that smaller businesses with fewer than 50 employees and less than £9,000,000 in annual turnover and/or annual balance sheet will not be considered undertakings in difficulty unless they are (a) subject to collective insolvency procedure under national law, or (b) in receipt of rescue aid (which has not been repaid) or restructuring aid (and are still subject to a restructuring plan). Read our article on the changes in full HERE to find out more.

Did you know that out of the top twenty, 75% of local authorities paying out the most are in London? Don’t miss out.

The government have approved for accredited lenders to be given an extra two months to consider applications for finance under the coronavirus business interruption loans scheme (CBILS). The scheme was due to end on September 30th but calls for an extension mean an extra two months to process and approve applications has been allowed, pushing the end date back to November 30th. Banking trade body UK Finance said the update “provides welcome clarity for businesses and should help give more firms the chance to access the finance they need.”

Following the recent EU changes in State Aid Law relating to the ‘undertaking in difficulty’ test for businesses, the British Business Bank has amended its Coronavirus Business Interruption Loan Scheme. The amendment means that smaller businesses with fewer than 50 employees and less than £9,000,000 in annual turnover and/or annual balance sheet will not be considered undertakings in difficulty unless they are (a) subject to collective insolvency procedure under national law, or (b) in receipt of rescue aid (which has not been repaid) or restructuring aid (and are still subject to a restructuring plan).

If you wish to apply for the “Bounce Back Loan” you will need to speak with your bank to begin the process. Providers are mainly only accepting (or prioritising) existing customers first. Check out our other Nordens article on the Bounce Back Loan Scheme to find a full list of bank providers, as well as their application forms HERE. 

Should you need assistance with determining your turnover or you would like more information on how to attain these loans, contact our expert team strategic team on 02085300720 or email businessdevelopment@nordens.co.uk

With the amount of different finance products that are available on the market today, it would completely depend on the reason and needs for the finance requirement.

Firstly – what is the reason for the finance? Different finance facilities are designed specifically for the needs. For example, if you are looking to purchase equipment, plant or a vehicle, then it may be best to look at an asset finance facility. If you are looking for finance as you struggle to collect amounts owed from customers, then an invoice finance facility may be your best solution.

If you mismatch a funding product to your need, it’s likely that it will be expensive and result in higher costs for you. Typically asset finance will work out at a lower cost to you if you purchased equipment than if you were to take out a term loan and use the money to buy the equipment.

The second thing you will need to think about is the time-frame. Whilst certain finance products are specifically designed for the need as mentioned above, there are certain facilities that take longer to get in place than others and therefore depending on your situation, it may be worth getting something in place sooner even if it is not the best product for you. Whilst this is not ideal, in some cases it will allow finance to be secured at a point of need allowing a refinance option down the line.

With help identifying if the need for finance, the timescale of when one is needed as well as the most suitable product, then get in touch with our Strategic or Corporate Finance team at Nordens today on 02085300720 or email businessdevelopment@nordens.co.uk