Early in the pandemic, the UK Government introduced initiatives to support UK businesses and their cash flow to help cushion the negative impact they would suffer.
What is the furlough scheme?
One of the most popular, and successful, initiative was the Coronavirus Job Retention Scheme (CJRS). This initiative was initially introduced on 20th March 2020 in order to support employers who were unable to undertake their normal trading activities through the lockdown.
This allowed employers to claim financial support for employees by covering up to 80% of their normal salary, up to a maximum of £2,500 per month per employee, plus employer national insurance contributions and minimum automatic enrolment pension contributions.
Statistics as of 15th July 2020
Changes to the furlough scheme
This initiative runs until the end of October 2020, though the UK Government have made changes, whereby employers will have to contribute towards some of the cost from August 2020 onwards.
From July 2020, employers are able to bring employees back on a part-time basis, with the UK Government topping the rest up, ensuring that employees still get 80% of their salary.
What happens after October?
In theory this is seen as a good thing by many, instead of shutting the initiative and letting UK businesses just drop off a cliff edge, they are phasing the scheme out in stages. The aim is to re-open the economy, generating income for UK businesses, whilst still supporting their cashflow.
However, in reality, the businesses that have needed to use the furlough initiative may still struggle with cash flow and experience financial hardship, especially when they have to cover 100% of the staffing costs, whilst customers may not return.
What if I do not have the cash flow to pay my staff?
One of the most important things to any business are the employees, therefore ensuring that they are paid on time is paramount.
Due to the pandemic and lockdown forcing businesses to shut for months, most will have used their cash reserves. Taking time to re-coup this may take just as long, if not longer.
What options are open to my business?
To take immediate financial pressure off your business, you may want to consider commercial funding. If your business was viable prior to the lockdown and you are confident that you can bounce back, then you may want to consider this option.
Bounce Back loans allow small businesses to apply for loans of up to 25% of their turnover, up to £50,000. As of 19th July 2020, over 1 million applications have been approved. Borrowers will not have to pay any fees and interest for the first 12 months of the loan, with no repayments due for the first 12 months.
Coronavirus Business Interruption loans allow businesses with a turnover of less than £45million apply for a variety of commercial funding options, ranging from business loans, asset finance, bridging and overdraft facilities, through accredited funders.
This is where The Funding Store could help, we have access to both CBILS accredited funders and alternative funders who have products available that have been tailored recently, with the effects of the current COVID19 pandemic on businesses, kept in mind.
This is great for you, and us, as it gives us both alternative options. The benefit of using The Funding Store is that we understand our panels’ lending criteria, allowing us to put together the strongest case possible for your business to obtain the funding that it needs.
So, if you are genuinely concerned about what alternative options are out there, then you have come to the right place, contact The Funding Store today on 01908 880420 or firstname.lastname@example.org, we are here to help.