Over the past few months, many small businesses have been severely impacted by the COVID-19 pandemic. Some industries may never fully recover, such as high street shops and travel agencies, but there are a few businesses that have seen a boom, such as e-commerce businesses.
There’s a huge amount of financial support available to help small businesses survive, or even grow in the pandemic. We’ll cover just some of the options in this article.
It’s important to distinguish between 2 main types of support – there’s grants, which don’t need to be repaid (subject to conditions being met) and loans, which must be paid back at some point. Using loans to attempt to solve financial issues is often not the best solution, so business owners should think carefully before taking on debt that they may not be able to repay. In this article we’ll look at some of the main grants available to local small businesses.
Adur & Worthing grants
Adur & Worthing have several generous grant schemes. The ‘Small Business Growth Grant’ is worth up to £2,500 and is available to help businesses established over 6 months ago. Its purpose is to improve efficiency and maximise the potential for business growth. The grant is provided as ‘match funding’. This means you will need money to pay for your project up front, then 50% of the expenditure (net of VAT) would be reimbursed after evidence has been provided to the council. We understand the council have been inundated with applications this year, but as the scheme has been run annually for the past few years, it is worth checking back again next September if you miss out on this round.
The ‘apprenticeship grant’ is administered in a similar way. It is available to businesses in all sectors and can be used to recruit apprentices of any age, or provide apprenticeship training to existing employees. The grant is worth £1,000.
Further to this, additional ‘professional development funding’ is available, particularly those in favourable sectors such as creative, digital, care, manufacturing, engineering & hospitality.
We recommend all local Adur & Worthing businesses visit https://www.adur-worthing.gov.uk/business-grants/#small-business-grant-funding to find out more.
One of the most exciting new schemes is the ‘Kickstart’ scheme. This allows employers to take on new employees aged 16-24 with full government funding, meaning that the employer gets a new member of staff for 25 hours per week for 6 months without any financial cost. In fact, the employer will receive an additional £1,500 grant to help cover setup costs (to cover recruitment, training, equipment etc) on top of the grant to cover wages. The scheme can be accessed by existing or new employers, so if you are currently working alone and have never had the confidence to take the plunge and employ someone for the first time, this could be the ideal opportunity. The employee must be paid at least the appropriate National Minimum Wage for their age (between £4.55 and £8.20 per hour). The employer can pay above this rate, but that part of their pay will not be covered by the grant. Employees are sourced via the local Job Centre, and individuals must be on Universal Credit to be eligible to apply for roles.
When the scheme was first announced, the criteria that you needed 30 placements to be eligible put a lot of small businesses off. However, small businesses can access the scheme via a collective, such as that being run by Worthing-based Freedomworks.
The scheme is open until at least December 2021. More details here: https://www.gov.uk/guidance/apply-for-a-grant-through-the-kickstart-scheme
Incentive payments for hiring a new apprentice
Apprenticeships are a fantastic alternative to university, allowing individuals to learn practical skills alongside college work, while earning a wage and (hopefully) avoiding amassing a huge student loan debt. This additional incentive was announced at the same time as the Kickstart scheme- if employers take on a new apprentice between August 2020 and March 2021, grants of between £1,500 and £3,000 are available (depending on the apprentice’s age and circumstances). The grants can be used for lots of different types of expenditure, including their salary, their travel, training or equipment costs.
CJRS grants / JSS grants
The Coronavirus Job Retention Scheme (CJRS), also known as the ‘furlough’ scheme, was due to come to a close in October 2020 however in light of the most recent announcement regarding lockdown from Thursday, the scheme will be extended.
Further information can be found here.
There is welcome news for sole traders and trading partnerships. Unlike the JSS mentioned above, the SEISS extension is not open to new participants. You must have been eligible for the first grants to receive the extension grant. The grant covers the period 1 November 2020 to 30 April 2021 and will be paid in two instalments. The first will be worth 20% of average monthly profits for three months (up to a cap of £1,875), and the level of the second instalment has not yet been set. It is expected that the method of claiming will be similar to that for the initial SEISS grants.
More details here: https://www.gov.uk/guidance/incentive-payments-for-hiring-a-new-apprentice
CX Accountants are a modern Chartered Accountancy practice based in central Worthing who work with e-commerce, business service & property investor clients in and around the local area.