This article was updated 9pm Wednesday 13th May. Please check back regularly, or follow us on Twitter or LinkedIn to keep informed of all the changes. For all our information around COVID-19 visit www.frenchduncan.co.uk/covid-19.
This blog post contains details of the various grants, loans and funding available to support businesses through this period. To jump to a specific section please use these links, or just scroll down to read it all:
A. Business Grants:
There are a number of grants available to business, depending on your size, sector and needs. This page provides a summary of each of these. You will find the key details we know so far, and where possible a guide on how to apply or next steps you should take.
At French Duncan we're aware many businesses will face challenges ahead, but we're here to help and support, and you can contact us at any time.
Pivotal Enterprise Resilience Fund:
PLEASE NOTE: Whilst the Pivotal Enterprise Resilience Fund was paused for new applications on Tuesday 5th May, and it was then announced that the Fund would double in size to £90m (see: https://www.gov.scot/news/sme-support-doubles-to-gbp-90m/). Applications will re-open from mid-morning on Thursday 14 May 2020, however Scottish Enterprise do expect the capacity to be reached again; they have stated that it is likely to close again at 5pm on Monday 18 May but we expect that it could close much earlier. We advise everyone to submit their application AS SOON AS POSSIBLE.
The Scottish Government has recently announced a new £45m grant fund (then doubled to £90m), the Pivotal Enterprise Resilience Fund. This bespoke grant award is available for Scottish SMEs that can demonstrate they are vulnerable but can present a strong business case for a viable future. Firms need to prove that they are vital to the local, regional or national economy. The details are summarised below and more information can be found at: https://findbusinesssupport.gov.scot/service/coronavirus/pivotal-enterprise-resilience-fund
Successful applicants will be able to provide evidence of, or demonstrate impact in, one or more of the following areas:
Other important information for the Pivotal Company Resilience Fund:
Demonstrate that you are vital to the local, regional or national economy:
In this section of the application form, you should provide a brief outline of the wider contribution that your business makes to your local community or region of Scotland. As above, this could include benefits that extend to other businesses, local supply chains, associated employment and wider social and community benefits.
In addition, any benefits associated with increased R&D activity, innovation, export potential, increased productivity, diversity and equality, skills and training, supply chain opportunities and a net zero carbon economy could also be included
Grants to help businesses - £10k - £25k:
Businesses can now apply for grants to help them deal with the impact of the coronavirus COVID-19) outbreak. The one-off grants are designed to help protect jobs, prevent business closures and promote economic recovery, and more than 90,000 ratepayers across Scotland will be able to benefit.
Small businesses in receipt of the small business bonus scheme or rural relief, as well as hospitality, leisure and retail business can benefit.
Two types of grant are now available to ratepayers:
Local authorities are administering the scheme on behalf of the Scottish Government, and are looking to make payments to successful applicants within 10 working days. Application forms can be found on your local council website, or can be provided by our team at French Duncan who are also available to discuss any queries you have on the application form.
Some other sector-specific grants & funding available:
B. Business Loans:
Coronavirus Business Interruption Loan Scheme (“CBILS”) - For businesses with annual turnover of no more than £45m:
This scheme is now available through certain providers (likely to be the ones detailed by clicking here). Summary details available at present are:
Full eligibility criteria will be published in due course but to be eligible for support via CBILS, the business must:
Please note that a limited number of further eligibility restrictions will apply.
Almost all business sectors are eligible, however there are a small number of excluded/restricted sectors arising primarily from EU de minimis-State aid rules.
What you need to do to apply:
We advise that your first stop should be to speak to your incumbent bank who will likely facilitate the loan for you. However you will probably need both financial projections and a high level business plan in order to move forward, both of which we will be able to assist with - so speak to any of the colleagues listed below.
Our team work with the majority of the providers in Scotland on a regular basis and will be able to assist you through the application process.
Coronavirus Large Business Interruption Loan Scheme (CLBILS):
Will offer loans of up to £25m to firms with an annual turnover of between £45m and £500m, which come with a government guarantee of 80%. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest, so unlike the scheme for small to medium-sized businesses, they will not get a 12-month holiday on paying the interest and fees involved.
For a business with turnover of between £45m to £250m, an accredited lender can provide lending of up to £25m. For a business with turnover of over £250m, lending is up to £50m. The accredited lender is able to utilise a government-backed partial guarantee of up to 80%.
Other key points to note:
More information on this scheme, which went live on Monday 20th April, can be found on the British Business Bank website (click here).
Bounce Back Loan Scheme
We believe this option will be relevant to many clients as it is intended to provide the most accessible route to quick cash. If you're unsure, here is what our Partner Greg Callan has to say on it:
“In my view the terms of the Bounce Back Loan Scheme make it a sensible choice for any business impacted. At no cost for the first year it can provide a safety net, delivering peace of mind that your business has funds to fall back on if required – the big unknown is timescale and this loan helps mitigate the impact. At a fixed 2.5% interest rate after year one, it could also help businesses to make longer-term plans – plus it has a simple application process and speedy turn-around-time. I would advise every business to strongly consider this option.”
The Bounce Back Loan scheme will help small and medium-sized businesses access loans worth up to 25% of their turnover, to a maximum of £50,000. So if your annual turnover was £150,000 you could apply for a loan of £37,500 (25%). If your turnover is greater than £200,000 the loan would be capped at £50,000. The lower limit on the loans is £2,000.
The government will guarantee 100% of the loan meaning firms don’t need to go through lengthy credit checking processes, and there won’t be any fees, interest or capital repayments to pay for the first 12 months. Loan terms will be up to 6 years.
What you get:
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020. More information can be found on the Government website by clicking here.
You may also find this blog by Greg Callan of interest, entitled 'Cash is Reality'.
C. Other COVID-19 Funding options:
Coronavirus Job Retention Scheme ("CJRS"):
We have a separate blog article all about what we know, and don't yet know, about this. Please visit: www.frenchduncan.co.uk/blogs-news/covid-19-hr-staffing/.
Innovation / Research & Development Funding Package:
The overall package of £1.25 billion was announced on Monday 20th April, and is made up of two elements which we've called A and B:
A: a £500 million investment fund (the Future Fund) for early stage, high-growth companies impacted by the crisis, made up of funding from government and the private sector.
This will be delivered in partnership with the British Business Bank and will provide UK based companies with between £125,000 and £5 million from the government, with private investors required to at least match the government commitment. The loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid.
To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third-party investors in the last 5 years. The scheme will initially be open until the end of September. Further detail on eligibility criteria and fund operation will be published in due course.
More information can be found on the Government webpage about the Future Fund (click here).
B: £750 million in grants and loans aimed at SMEs focusing on Research & Development.
The £750 million of support for the most R&D intensive SMEs will be available through Innovate UK’s existing grants and loan scheme.
Innovate UK will accelerate up to £200 million of grant and loan payments for its 2,500 existing customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. Innovate UK expects that the first payments will be made by mid-May.
Please note, in many cases Innovate UK claims require to be certified by an independent accountant. The French Duncan Grants Team has extensive experience in this area and would be happy to provide any advice, and full contact details for four members of this team can be found directly below.
COVID-19 Loans/Grants and State Aid definition:
We're aware of discussions and queries around the various COVID-19 Loans / Grants, and whether any of these count as 'State Aid', which in turn to preclude other support or tax credit schemes. Our Corporate Tax team have written separately about this, which can be found on this webpage by clicking here.
At French Duncan we have a lot of experience in grant funding and loan agreements, so will be able to help you through our dedicated teams covering Corporate Advisory, Business Restructuring, Corporate Taxation & HR Services.
Whilst some of our staff are currently working from home, all of the above can be contacted on their email addresses or on 0141 221 2984.
Other COVID-19 Information:
For all our help, support and information around COVID-19 / Coronavirus visit www.frenchduncan.co.uk/covid-19, where you can link to articles deferring HMRC payments, tax and business rates, debt assistance & restructuring and much more.