The loans and grants small businesses can apply for now

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Small businesses in difficulty can obtain support of several thousand pounds in the form of grants and loans.

It comes as the coronavirus pandemic has hit millions of businesses hard.

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We explain where to get a loan or grant if you are a small business ownerCredit: Getty

A loan is money for your business that you have to pay back within an agreed timeframe, and you will likely be charged interest.

Whereas a grant is cash assistance that you don’t need to repay.

Finding the grants you are eligible for can take time, but it is not impossible to find sources of funding that you do not have to repay.

Michelle Ovens, founder of Small Business Britain, told The Sun: “Many businesses, especially those that are forced to shut down, can get financial support from the government or the council, so it’s worth doing your research to find out. which is available to you.

“The best place to start is the government or local authority website.

“But there are plenty of other helpers as well, much of which is free; whether it’s business advice on how to diversify your business, helping to cut costs, or helping with managing your business. your sanity. “

Below, we put together different types of support depending on your situation.

Government support during the Covid

The government has extended many Covid-19 measures such as the leave scheme, vacations at professional rates and the reduced VAT rate this year.

It has also rolled out other support in the form of grants and loans, below we round up what is available.

Subsidies to self-employed workers

The Self-Employed Income Assistance Scheme (SEISS) supports millions of Britons working for themselves during the coronavirus crisis.

The fourth grant for the self-employed is worth up to £ 7,500, Chancellor Rishi Sunak confirmed in the March 3 budget.

It will cover lost earnings until February, March and April due to the coronavirus.

The Chancellor also confirmed that there will be a fifth and final grant available covering lost earnings for June, July and August.

This value of this fifth grant will be determined by a rotation test,
which means that businesses will receive different levels of support depending on the severity of their impact.

Applications for the fourth grant will be open from the end of April, while it is not yet clear when Britons will be able to apply for the fifth.

Restart the grants

The government’s £ 5bn restart grant for businesses will help businesses reopen and restart after the lockdown.

Non-essential retail outlets, which can open in mid-April, will be eligible for grants of up to £ 6,000 per local.

Hospitality and leisure businesses, such as gymnasiums, can get up to £ 18,000 as they will open later.

Coronavirus rebound and disruption loans

Bounce Loans (BBL) allow small and medium-sized businesses to borrow between £ 2,000 and up to 25% of their turnover.

The maximum loan available is £ 50,000.

The government guarantees 100% of the loan and there will be no fees or interest payable for the first 12 months.

After 12 months, the interest rate will be 2.5% per annum.

Meanwhile, the Coronavirus Business Interruption Loan (CBILS) program is helping businesses access loans and other types of financing up to £ 5million.

The government guarantees 80% of the financing to the lender and pays any interest and charges for the first 12 months.

Both programs are open for applications until March 31, 2021.

Recovery loan program

Once the rebound and CBILS programs are closed for applications, they will be replaced by a new recovery loan program.

Loans can range from £ 25,000 to £ 10 million, 80% of which is government guaranteed.

The program starts April 6 and is open until December 31, subject to revision.

Loans will be available from a number of lenders, but the government has yet to announce which ones.

Advice support

Businesses that are not eligible for government restart grants may be able to get money through their local councils.

For example, the Additional Restriction Grant (ARG) fund is a one-time discretionary fund for various industries.

It must be distributed by March 31, 2022, otherwise the funds will be clawed back by the government, so it is worth applying.

You can find your town hall by entering your postcode on the Gov.uk website.

Then just click on the council’s website and search for small business support and follow the instructions on how to apply.

Individual small business grants

The government has a free online tool that allows you to search for grants and loans available for small businesses.

You can filter your search by business stage, industry, number of employees and region to find the ones that suit you best.

There are currently 66 grants listed on the government site, some of which are worth hundreds of thousands of pounds.

There are strict eligibility criteria, however, and many of them require that you live – or plan to relocate – in a certain area.

For example, entrepreneurs in Scarborough can get up to £ 5,000 to expand their business.

While companies based in the West Midlands with business operations in Birmingham could get up to £ 171,000 to upgrade their fleet of vehicles.

Below, we’ve rounded up other individual grants available to small business owners across the country.

Innovate UK Smart Grants Program

Innovate UK Smart Grants helps deliver research and development innovations that could impact the UK economy.

The current round of funding is open until May 26, 2021.

Grow It Award

This grant is intended for entrepreneurs who aim to solve a social problem.

You can ask for up to £ 15,000 to help you grow with a one-on-one coaching, training, mentoring and networking package.

The Grow it Award focuses funds on access to employment and finding solutions for an aging society.

New company allowance

This government subsidy is intended for unemployed people who want to start their own business.

Speak to your Jobcentre Work Coach and if you are eligible you can receive a weekly stipend worth up to £ 1,274 over 26 weeks as well as a mentor.

You can also get it if you are self-employed and benefit from Universal Credit, but you will not be entitled to the weekly allowance.

ReBoost Community Actions Fund

The Community Shares ReBoost Fund helps community businesses raise capital that can support their recovery from Covid-19.

Apply for between £ 3,000 and £ 5,000 in development grants or you can get a matching capital investment, which is usually £ 25,000.

The latter would correspond to the amount raised by supporters of your company.

The fund is open for applications until April 2021.

National Lottery Heritage Fund

This fund awards grants ranging from £ 3,000 to £ 5 million to heritage projects ranging from designed landscapes to cultural traditions.

The grants for 2021-2022 will prioritize projects that stimulate the local economy, encourage skills development and job creation.

You can find out more about the support offered and how to apply on their website.

Small business loans

Check with your bank or other lender

The most common way to get a business loan is through a bank, with about a third of small businesses applying for it, according to the British Business Bank.

However, you may find that the interest rates are above 6% and come with complex application requirements.

You can compare business loans using a comparison site such as Go Compare or MoneySuperMarket.

They list the lenders – large and small – and the type of loan that will be granted to you.

Start-up loans

Small business owners can also apply for a government-backed start-up loan worth £ 500 to £ 25,000 to help them start or grow their business.

You also have access to a mentoring network offering free support and advice.

Unlike a business loan, this is an unsecured personal loan.

This means that you don’t have to put your assets as collateral to secure the loan, while other loans may require your home as collateral.

Instead, the lender will approve the loan based on your creditworthiness.

Remember that you will have to pay a fixed interest rate of 6% per annum.

You can repay the loan over a period of one to five years, and there are no application fees or prepayment charges.

What to keep in mind if you are applying for a business loan

If you are looking to take out a loan for your business, we explain what you need to keep in mind.

Eligibility for a loan will depend on your personal financial situation as well as that of your business.

As with any other loan, the lender will review your credit history, but they may also want to consult a business plan or accounts.

In other words, you need to make sure your finances are in order before you ask for anything.

To apply for a business loan, your business will usually need to be VAT registered and there may also be a minimum monthly turnover.

Some providers may also require that you have at least two years of deposited accounts, although not all lenders will.

From start-ups to small businesses, we’re sharing tips on how to handle working from home during Covid.

Last month, 1.4 million businesses were given more time to pay off Covid rebound loans.

Meanwhile, hundreds of thousands of small businesses could receive payment from insurers if they were affected by Covid after a court ruling.

Stacey Solomon sobs while reading thank you letters from small businesses she has helped

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