No one could have ever predicted the sheer speed of COVID-19’s virality, and the cataclysmic impact it would make on the world. In the past three months, we have seen some of the most prosperous countries completely lockdown in light of the pandemic, the economy go into freefall, and the livelihood of billions of small business owners out at risk or snatched away before help could arrive.
There is help and some light at the end of the current tunnel, but before I get into the financial help that is available for small businesses, I want to take a moment to say that many of us are very fortunate from where we’re sitting. Those deemed as key workers continue to keep the country running and fight to keep us alive and safe. Every day brings a new challenge stemming from this unprecedented set of circumstances and we must have hope that this pandemic will be over soon, with minimal cost and disruption to life, and with a heightened sense of awareness and kindness for our fellow human beings.
The future is uncertain for everyone, particularly small businesses who, as we are told repeatedly, are key to the good health of any global economy. With many countries on lockdown, and the whole world dealing with a novel virus, a stabilised economy cannot be expected - not now, perhaps not for many months once the pandemic is declared over. Although we couldn’t find stats for the UK, in the US, think-tank, the Economic Policy Institute predicts that 15,000 retail stores will permanently close in the US. Most likely, we are looking to live and work throughout a deep recession. For some business owners, this will be their first experience of an economic downturn; for others, it will stir painful memories of the Financial Crisis of 2007-8. For all, it will test their mettle as courageous leaders in the face of adversity.
Already experiencing a downtown due to the creeping closure of many high streets, brick and mortar businesses have been hit the hardest. Alongside these household names, industries we take for granted that none of us ever could have imagined would crumble under such unexpected circumstances - travel, hospitality and fashion.
There are some beacons of light shining through the fog and darkness. Food chains like Leon, Pret and Greggs remain open for NHS workers. Deliveroo is helping thousands of restaurants (and delivery people) maintain a small income through home delivery options, (although the ethics around delivery food services in a pandemic has been put into question by both Wired and the Guardian). Our local economies, often overlooked in favour of superstores and e-commerce, are now taking centre stage as we are encouraged to do our part and shop small where we can.
At tomato pay we want to see small businesses prosper, being a small business ourselves, we can empathise completely with the challenges to cash flow that this crisis brings. Although we can’t directly pump money into your business, we wanted to ensure that we play our part in helping hard-working business owners and those who will need to heed the financial call to assist them, where we can. So firstly, we created a place for small businesses to visit with updated information on initiatives that can help; secondly by working on a platform that can help small businesses get the financial products they need and deserve.
You can see below a list of useful links below for small businesses. This blog will be updated daily as we continue to find out more information.
UK financial help for small businesses
Main points to be aware of:
- A Coronavirus Job Retention Scheme: “HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1 March and is initially open for 3 months, but will be extended if necessary. HMRC will set out more details shortly.”
- Deferring VAT and Income Tax payments: “We will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. Income Tax payments due in July 2020 under the Self-Assessment system may be deferred until January 2021. For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.”
- A Statutory Sick Pay relief package for SMEs: “Employers with fewer than 250 employees will be eligible, it will cover two weeks of SSP per eligible employee who has been off work because of COVID-19.” A rebate scheme is being developed. Further details will be provided in due course once the legislation has passed.
- A 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England: “There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.” You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
- Small business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief: “Eligibility criteria, your business is based in England; you are a small business and already receive SBRR and/or RRR; you are a business that occupies property.” You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000: “Eligibility criteria, your business is based in England; your business is in the retail, hospitality and/or leisure sector; your business has a rateable value of under £51,000. Businesses which don’t pay business rates are not included in this scheme.” You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
- The Coronavirus Business Interruption Loan Scheme offers loans of up to £5 million for SMEs through the British Business Bank: “Eligibility criteria, your business is UK based, with turnover of no more than £45 million per year; your business meets the other British Business Bank eligibility criteria.” To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan.
- A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans: “Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.” All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.
- The HMRC Time To Pay Scheme: “ You are eligible if your business, pays tax to the UK government; has outstanding tax liabilities.” If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call HMRC nearer the time.
- New phone number for self employed and SMEs who need to talk to the tax authority about COVID-19, 0800 024 122.
- British Business Bank
- Bank of England
- UK Government advice
- UK Government advice ii
- UK Government advice for employees
- UK Government Spring Budget 2020 Speech
- £1 billion Business Support Fund opens: Scotland Government advice
- Coronavirus WhatsApp support from the UK Government
- Sign up for alerts from the UK Government on coronavirus
- Wales Government Advice
- Australia Government Advice
- Ireland Government Advice
Insightful blogs from around our industry
- Sifted link on small business help
- Funding Options, and how they are helping small businesses
- Iwoca, and how they are helping small businesses
- FSB advice to small businesses
- Money Saving Expert, Martin Lewis’s advice
- Innovate Finance’s Covid-19 Hub
- Fintech North Covid-19 support
Initiatives, grants and discussion groups for entrepreneurs and small businesses (if there are others out there that I have missed out, please contact us and let us know so we can add it!)
- Facebook offering $100m in cash grants: Facebook Small Business Grants
- Planoly offering two $5,000 grants in Austin, Travis County, or Williamson County.
- Hubspot offering discounted services for small businesses that qualify
- Salto Camp Emergency
- Enterprise Nation are supporting businesses to pre-sell their services now, supported by Crowdfunder
Global health and other advice on COVID-19
Although it’s not the main topic of this blog, we thought it would be helpful to add the links below, just in case.
- World Health Organization (WHO)
- General Government advice
- Closure of small businesses announcement - UK Gov
- Government advice for parents
- Volunteering opportunities throughout this pandemic
- Sifted link of businesses helping people out
For financial institutions who want to help their small business customers, you can see how tomato pay have been at the forefront of this challenge for years.
- How do late payments impact small businesses?
- Why small businesses continue to struggle financially inc SME case study.
- Why is it so difficult for small businesses to access finance?
- Make it easy: A guide to behavioural science in finance.
- Ethics, Behavioural Science and tomato pay.
- Happy first birthday, Open Banking!
Although it is difficult at present, we are looking at how the tomato pay platform can immediately support financial institutions and small businesses, and in turn, the future state of the economy in the UK and beyond. If you have ideas on how we can help with this, or want to speak to us, you can contact us here.