The Budget & SMEs pt 3: Restart Grants & Recovery Loan Scheme
Welcome to our third and final post on what the Chancellor’s 2021 Budget means for small businesses. In our first article, we covered the Furlough Scheme, SEISS and the reduced VAT rate for hospitality and tourism businesses. The second post got you up to speed on the 130% Super Deduction, changes to Corporation Tax and the need for anyone with a ‘Time to Pay’ arrangement with HMRC to make sure their first payment is allocated against their Class 2 NICs. In this final piece, we’re going to cover Restart Grants and the Recovery Loan Scheme.
The new Restart Grants scheme is aimed at businesses that have had to close due to pandemic restrictions. Non-essential retail firms can claim up to £6,000 per premises to help them reopen (currently this will be no earlier than 12th April). Firms that can’t open until later, such as businesses in the leisure, hospitality and accommodation sectors, can claim up to £18,000. This figure depends on the rateable value of your premises:
- Rateable value (RV) of £15,000 or less – maximum claim of £8,000
- RV between £15,000 and £51,000 – maximum claim of £12,000
- RV over £50,000 – maximum claim of £18,000
To be eligible, your business premises must be in England and you must normally pay business rates. You must have been required (not chosen) to close during the current national lockdown or between 5 November and 2 December 2020. You must also have been unable to provide your usual in-person customer service from your business premises. (Note that this excludes accountants like us and other firms that can still provide an excellent service via home-working).
Businesses need to make claims via their local authority. You can find the website for the relevant council here.
Recovery Loan Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme will both end on 31st March 2021. A new Recovery Loan Scheme will replace both.
Recovery Loans will be 80% government-backed. Two types of finance are available:
- Loans and overdrafts of between £25,001 and £10 million per business. (Terms of up to six years).
- Invoice / asset finance of between £1,000 and £10 million per business. (Terms of up to three years).
You don’t have to give personal guarantees for finance up to £250,000. Your can’t use your main home as security.
To be eligible for a Recovery Loan, you must be trading in the UK. Your business must be viable (or would be viable, if it weren’t for the pandemic). You must have been adversely affected by coronavirus and you must not be in collective insolvency proceedings. Banks, building societies, insurers and reinsurers (but not insurance brokers) cannot apply. Nor can public sector bodies or state-funded schools.
Recovery Loans open on 6th April 2021. We don’t yet have details of accredited lenders, but we will publish a list in due course.
As ever, if you are a THP client and you’d like advice on either Restart Grants or Recovery Loans, please get in touch with your account manager. We’d be very happy to help.
About Ben Locker
Ben Locker is a copywriter who specialises in business-to-business marketing, writing about everything from software and accountancy to construction and power tools. He co-founded the Professional Copywriters’ Network, the UK’s association for commercial writers, and is named in Direct Marketing Association research as ‘one of the copywriters who copywriters rate’.