Chancellor Rishi Sunak has announced, on the 17th March, that £330 billion of loan guarantees will now be made available to support businesses in the face of the Coronavirus pandemic. This is the equivalent of 15% of the UK GDP.
Below is the summary of measures to be taken. The full version can be found on the Government website.
To ensure that businesses have access to the funds they need, the government will be providing:
- Support for liquidity amongst large firms, with the Bank of England helping bridge Coronavirus disruption to cash flows through loans
- Increasing the amount businesses can borrow through the Coronavirus Business Interruption Loan Scheme from £1.2 million to £5 million, with the first 6 months of that finance interest free
- Including new legal powers in the Covid Bill
The Government are providing £20 billion to help the most-affected firms manage their cashflow by:
- Giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the next 12 months
- Increasing grants to small businesses eligible for Small Business Rate Relief from £3,000 to £10,000
- Providing further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000
Further to this:
- Mortgage lenders, have agreed to support customers that are experiencing issue with their finances as a result of COVID-19.
- Government advice to avoid pubs, clubs, theatres etc. is sufficient for businesses to be able to claim on their insurance where they have the appropriate business interruption cover for pandemics in place.
- Government will relax planning regulations to allow pubs and restaurants to start proving takeaways without a planning application. This should help to provide meals to those people who need to self-isolate.
This action taken by the government means that over £3.5 billion in additional funding will be provided to the devolved administrations for support to businesses in Scotland, Wales and Northern Ireland.
It should also be noted that in the Chancellor’s speech, there was mention of a potential support package for airlines and airports in the face of worldwide travel bans.