What support is available for Start-ups?
According to the guidelines laid down by the Treasury, many Start-up businesses will not be considered “viable” as they are at an early stage in the investment cycle (i.e. delivering negative returns but with strong growth prospects). This means they are unlikely to qualify for CBILS although for primarily UK based Start-ups it is still worth making enquiries as policies are rapidly evolving.
For early-stage businesses in their first two years of trading, the British Business Bank’s Start-Up Loans programme (loans £500 to £25,000 at 6% p.a. interest) may be more suitable. Visit www.startuploans.co.uk for more information.
For start-up businesses that are unable to access CBILS, the Government launched The Future Fund in May 2020 via the British Business Bank, which provides convertible loans to UK-based innovative companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. This scheme is available until 30 September 2020 initially.
Your business is eligible if:
- it is UK-incorporated – if your business is part of a corporate group, only the parent company is eligible
- it has raised at least £250,000 in equity investment from third-party investors in the last five years
- none of its shares are traded on a regulated market, multilateral trading facility or other listing venue
- it was incorporated on or before 31 December 2019, and
- at least one of the following is true: (i) half or more employees are UK-based; and/or (ii) half or more revenues are from UK sales.
Further information is available on the Government website, www.gov.uk/guidance/future-fund
The Government is also offering additional support for small and medium size firms that are primarily focused on research and development. This targeted support is available through a continuity grant and loan scheme. The grant scheme is only available until 29 May 2020 while the loan scheme is open for applications until all the money is allocated or 31 December 2020 (whichever is earlier). This scheme is administered by Innovate UK, the national innovation agency, and this support will mostly only be available to existing Innovate UK customers.
Further information is available on the on the Government website, www.gov.uk/government/publications/access-coronovirus-business-innovation-support-package
Related FAQs
The CMA is the government body that is responsible for protecting consumers from unfair trading practices. It has announced programme of work to investigate reports of businesses failing to respect cancellation rights during the Coronavirus pandemic.
Based on the complaints received by them from consumers, the CMA has identified three sectors of particular concern:
- Weddings and private events
- Holiday accommodation
- Nurseries and childcare providers
The CMA has expressed concern about the number of complaints that it has received about businesses seeking to retain deposits for cancelled events, undue restrictions being placed on use of vouchers provided for cancelled bookings, and payments being demanded to hold open nursery places.
The CMA has said it will prioritise investigation of these sectors, and then move on to other sectors.
This free Getting back to business webinar was held on Wednesday 6th May. On this video, employment partner Paul Scope and associate Flora Mewies looked at your options if you need to flex your employee resource or reduce cost without reducing headcount. This may apply across the business or to particular functions. They discussed a range of options when the furlough scheme comes to an end, including: lay off, short time working, reduced hours, reduced pay and other ways to be flexible.
They also discussed the pros and cons of each option, and cover what you will need to undertake with each of these routes.
It is envisaged that employees of organisations falling into the first two categories set out above and won’t be eligible for the job retention scheme in relation to the majority of their employees. It is envisaged that NHS Trusts for example are going to require their staff to be working at full capacity where possible. However, the guidance doesn’t definitely exclude public sector organisations from furloughing employees and notably the government expects such organisations to use public money to continue to pay staff and not furlough them, rather than say requires. In reality, it is difficult to see how such an organisation will be able to rely on the scheme, but the guidance doesn’t completely rule it out.
As we move to look at re-opening businesses and getting people back into the workplace there is work to be done by employers, firstly in planning how they are going to do this, and secondly, communicating those plans to staff. The only way in which businesses are going to be able to manage the transition back to some form of normality is by speaking to their staff and re-assuring them about the measures that will be put in place to safeguard their health and safety in order to enable them to return. Any successful return to work will need to based on carefully thought out plans and providing re-assurances to employees that necessary action is being taken.
Employers will be focusing on:
- How do I get my workforce back safely, and
- How do I give my workforce the confidence to return.
Every company has to file accounts at Companies House every year. If they are filed late, a fine is automatically levied. If there is a long delay in filing them, the directors are at risk of prosecution and the Registrar of Companies might start a process which could ultimately lead to the company being struck from the register.
However, Companies House has recognised that businesses might currently face exceptional problems in preparing and filing their accounts on time and so have posted a notice on their website which says that if immediately before the filing deadline, it becomes apparent that accounts will not be filed on time due to coronavirus, you can make an application to extend the period allowed for filing.