Unless you’ve been living under a rock since the start of March, it’s been impossible to ignore the coronavirus (COVID-19)’s impact. Since the implementation of strict social distancing measures, life has changed markedly, and businesses may be finding it hard to stay afloat. While the government has introduced several schemes to help support those struggling during the crisis, you will need to meet specific eligibility criteria to be accepted. Even so, what is offered may not be suitable for your circumstances. So, what other support is available to help with coronavirus-related debt?
What support is the government offering?
The government is offering, amongst other schemes, business support grants, deferrals of VAT payments, a support scheme for the self-employed, and corporate finance facilities for larger businesses.
One of the options most appealing to small and medium-sized enterprises (SMEs) is the Coronavirus Business Interruption Loan Scheme (CBILS). CBILS is a government scheme which allows SMEs, who are struggling with cash flow problems caused by the virus, access to various sources of finance (such as asset finance, invoice finance and loans).
Am I eligible for this support?
Before you can receive any money from the government’s support schemes, you should check that you meet the eligibility criteria. Failing to meet these criteria could result in your application being rejected. For example, the following criteria are some of what’s required if a business wishes to apply for the Coronavirus Business Interruption Loan Scheme (CBILS):
- Being a UK-based SME, with an annual turnover lower than £45 million.
- You’ll be borrowing less than £5 million.
- Your business was in a solvent state before being impacted by the virus.
Different arrangements and support schemes will have their own set of eligibility criteria.
What are my other options?
If you don’t qualify for the government’s support schemes, you shouldn’t panic. Your options going forwards will depend on the state of your business and the direction that you wish to take it. If your company is insolvent, you should approach a licensed insolvency practitioner, who will assess your situation and recommend an insolvency procedure best for your circumstances. These procedures may involve paying back your liabilities in monthly instalments at a rate you can afford. Alternatively, it could involve calling in a third-party to help rescue the company. Another option is applying for commercial finance; an umbrella term for a number of lending options allowing businesses access to cash. These options can be useful if a sizable invoice hasn’t been paid on time, or cash flow is an issue.
Summary
The coronavirus outbreak has had an enormous impact on businesses, and many business owners may be concerned about their potential futures. A range of government support is available, but these options may not be the most suitable for your business. If the government’s solutions are not suited for your situation, there are alternative options, including commercial finance, or insolvency options if your business finds itself unable to cover its liabilities.
