Government coronavirus support for SMEs: what grants are available?

Banks, local authorities and the government are working together to support businesses facing challenges relating to the coronavirus crisis, but many SMEs are not aware of the support available. This week a panel of experts, including the Head of Local Authorities at Barclays – whose specialist team banks many of the UK’s local councils – held a Facebook Live event to raise awareness of the new coronavirus government grants. Here’s what you need to know.

What are the coronavirus government grants?

The coronavirus government grants are made up of two funds: one designed for small businesses (the Small Business Grants Fund) and the other for businesses in the retail, hospitality and leisure sectors (the Retail, Hospitality and Leisure Grant Fund).

Small businesses can apply for a one-off grant of up to £10,000, while businesses in the retail, hospitality and leisure sectors can apply for a grant of either £10,000 or £25,000, dependent on their rateable value.

Just under £13bn of funding has been provided by the central government, but local authorities are in charge of its distribution – meaning business owners apply through their local councils.

Do businesses owners know about the grants?

Panel participants suggested that many businesses are currently unaware of the grants available through their local authorities. Fraser Mackay, Head of Local Authorities, Barclays Corporate Bank, whose team works in partnership with councils to offer financial expertise, overcome challenges and ensure efficiency, highlighted a recent conversation he’d had with a local authority employee, who cited raising awareness as an obstacle to distributing the funding:

“They told me that they had paid about 35% of what they'd expected to pay, but they've actually paid all of those businesses that have applied. So clearly there's a lot of businesses out there that are eligible but haven't yet applied.”

Many business owners are rightly conscious of increased instances of fraud during the coronavirus crisis – but Mackay suggested that this has also made eligible organisations cautious at the prospect of applying for the grants.

“Most businesses will apply for these grants through the local authority website and that means them inputting details about the business and details about their bank account,” Mackay said. “I know some people are nervous about that, but that's the only way the local authority can capture the majority of these details.”

Jo Lappin, CEO of Cumbria Local Enterprise Partnership, whose team has been working hard to facilitate the grants for eligible companies in the area, was also on the panel. She confirmed she’d faced scepticism about the validity of the scheme itself, with some believing “this is actually a scam”.

Mackay said Barclays was investing additional time combatting scams, and that the bank’s internal anti-fraud systems have been “enhanced significantly over the last four or five weeks”. The bank advises that businesses should ensure they receive accurate and up-to-date information – as well as making the most of the opportunities for financial support – by contacting their local authorities to find out more about the grants.

Will my business have to pay coronavirus government grants back?

Lappin said that many businesses – particularly those who have not applied for funding before – had faced confusion about whether the scheme constituted a loan or a grant. She provided some clarity on the non-repayable payments.

“Businesses, who don't use loans and have probably never applied for a grant previously, find it very difficult. We've been sending very clear messages – you are absolutely entitled to this; you must access the grant and there is no requirement to pay it back.”

How can I find out if my business is eligible?

Businesses need to fulfil a number of factors in order to qualify for either the Small Business Grants Fund or the Retail, Hospitality and Leisure Grant Fund.

Megan Bulford, Head of Economic Analysis at the Confederation of British Industry, said that retail businesses had found the process relatively straightforward, as a result of pre-existing retail relief from business rates. However, she suggested those in the hospitality and leisure sector had lacked certainty on their eligibility.

Lappin said that contacting local authorities should be a first step for any small business.

“If anybody thinks they're eligible and they've not already been contacted, they absolutely must make contact with their local council or authority, who will have a dedicated place on their website that will give you all of the information that you need in order to access the grant.”

She also recommended using the business coronavirus support finder – a government tool which helps determine the loans, tax relief and cash grants that businesses can access.

What coronavirus grants are available in Scotland, Wales and Northern Ireland?

While the Small Business Grants Fund and the Retail, Hospitality and Leisure Grant Fund are only available to businesses based in England, there are similar grants for businesses in Scotland, Wales and Northern Ireland.

Bulford offered listeners an overview on how the funding varied across the UK ­– for example in Northern Ireland, businesses with three properties or fewer can only access one grant – whereas in England, grants are awarded per property.

In Scotland, rateable brackets of eligibility are distinct from those in England, and currently grants are not awarded per property – although from 5 May, businesses will be eligible for 75% grants on additional properties.

In Wales, £10,000 grants are available for up to two properties in each local authority area.

Businesses should look at the websites of their governments and local authorities to find out specific local details on eligibility criteria. 

What other advice is there for small businesses?

Bulford suggested investigating VAT payment deferrals for businesses concerned about cash flow­ – an option allowing companies to postpone VAT payments due before the end of June until the end of the tax year.

She also drew attention to upcoming schemes, such as the Coronavirus Statutory Sick Rebate Scheme, which will enable employers to reclaim money spent on sick pay due to the coronavirus crisis, and the Self-employment Income Support Scheme, which is expected to launch in May.

For Lappin, it’s essential for businesses to communicate with their Local Enterprise Partnership: “We really want to make sure that everybody can do what they need to be doing to access this funding. Colleagues across the country are doing everything they can to create emergency support schemes and programmes.”