Businesses in some of the hardest-hit sectors can access new one-off grants to help them get through the third national lockdown.
Prime Minister Boris Johnson announced tighter restrictions earlier this week in a bid to stem the rising tide of COVID-19 cases within the UK.
These restrictions are in place until 15 February 2021 and will begin to be lifted as more people receive vaccinations to protect against the virus.
Until then, all non-essential shops, leisure and entertainment venues are shut, with pubs and restaurants only allowed to sell takeaway food.
It comes as a bitter blow to small business owners, who are looking to bounce back from the devastating financial effects of the coronavirus.
According to the Federation of Small Businesses, 69% of small businesses are now in debt, with 40% saying the level of debt is “unmanageable”.
Chancellor Rishi Sunak announced £4.6 million in support to help around 600,000 firms in England stay afloat until the spring.
Firstly, businesses in retail, hospitality and leisure sectors need to be closed due to COVID-19 in order to qualify for the latest round of support.
The amount a business will receive is based on the rateable values local councils use to calculate business rates bills.
For businesses with rateable values of more than £51,000, the grants will be worth £9,000.
Those with rateable values of between £15,000 and £51,000 stand to receive £6,000.
Firms with rateable values of less than £15,000 will be eligible for one-off grants of £4,000.
Another £594 million will be made available to businesses outside of the hardest-hit sectors, Sunak said.
The money will be available from local authorities in England, while funds are also available to devolved administrations elsewhere in the UK.
Sunak said: “This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”
‘Not enough for most small firms’
Business groups have welcomed the immediate cashflow support, but slammed the Government’s “drip-feed approach”.
“This is not going to be enough to save many firms,” said Adam Marshall, director-general at the British Chambers of Commerce.
“Many smaller firms won’t qualify for the full headline amounts, and will be left struggling to see how this new top-up grant will help them out of their cashflow problems.
“Support must cover not just those on the frontline of retail, hospitality and leisure, but also firms in supply chains and wider business communities who are also feeling the devastating impacts of these restrictions.”
Approaching a spring cliff-edge?
Depending on the rollout of COVID-19 vaccinations, the furlough scheme and other government support measures are due to end in the spring.
This presents a rather large elephant in the room for Sunak, as the Institute of Directors (IoD) recognise.
Roger Barker, director of policy at the IoD, said: “This new grant package is welcome, and will go some way to reassuring the worst-affected businesses.
“But the Chancellor must remain wary of a spring cliff-edge in business support as the furlough scheme and other support measures unwind.”
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