What Business Support Grants Are Available for Small Businesses due to COVID-19?

Editor’s Note: This article was first published on December 11, 2020.
Last Update: August 10, 2021.

COVID-19 pandemic caused a global transformation of social life, especially how people interact with each other to minimize the risks of getting infected. The new conditions of social life needed faster adaptations of technologies in specific areas such as health, finance, and business in general.

Whilst the healthtech and fintech businesses might have more opportunities during the pandemic, it’s not easy to say the same for businesses in other industries. McKinsey & Company reports that 80% of SMEs say their revenues are declining. But, don’t worry, the UK government grants small business support funds to help you get through the pandemic.

There are different types of financial aids under the Small Business Grant Fund (SBGF). Four of them are specifically for the self-employed or small business owners. Other financial supports are whether for large businesses; about tax regulations that almost every business should know; or about the effects of the restrictions on your business.

1. How Can You Get COVID-19 Support If You Are Self-Employed?

The Self-Employment Income Support Scheme has been extended three times until November 2020. The fourth expansion was until June 1, 2021, and it covered February 1, 2021, to April 30, 2021. It was withdrawn on June 2, 2021. The scheme is active again and the fifth expansion covers 1 May 2021 and 30 September 2021.

You have to prove your profit decreased, and will be decreasing due to the COVID-19 pandemic if you want to claim Self-Employment Income Support. You can claim if you;

  • are currently trading but are impacted by reduced demand due to coronavirus (COVID-19),
  • have been trading but are temporarily unable to do so due to COVID-19,
  • intend to continue to trade,
  • reasonably believe there will be a significant reduction in your trading profits.

You don’t usually need to meet more than one condition but you must be sure that the cause of your income loss is directly business-related. For example, you might not be eligible if the reason for the reduction of your profit is an increase in the costs of protective materials such as masks, hand sanitisers, and gloves.

1. How Can You Get COVID-19 Support If You Are Self-Employed?

2. How Can You Apply For The Coronavirus Business Interruption Loan Scheme?

You can apply for the Self-Employment Income Support Scheme even if you’re a member of a partnership, but you should look for Coronavirus Business Interruption Loan Scheme (CBILS) if you own a limited company or another type of SME. You might be eligible for up to a £5 million financial support scheme if your business in the UK has an annual turnover of up to £45 million. Eighty per cent of the finances of the lender is under the government guarantee, and it pays interest and any fees for the first 12 months.

You can approach any of the 117 lenders participating in the scheme with the required documents and proof to apply.

The Coronavirus Business Interruption Loan Scheme closed to new applications on 31 March 2021.

3. How To Apply For The Coronavirus Future Fund?

You might want to check if you are eligible for the Future Fund, especially if you own a tech startup and you can prove that the pandemic affected your business. The fund loans £125,000 to £5 million to companies that;

  • is UK-incorporated
  • raised at least £250,000 investment in the last five years
  • never traded shares on a regulated market, multilateral trading facility, or other listing venues
  • was incorporated on or before 31 December 2019
  • employs at least half or more of its staff in the UK, or has half or more of its revenue from the UK sales

You can check your eligibility status from the Future Fund website.

The Future Fund scheme closed to new applicants on 31 January 2021.

4. Can Your Small Business Apply For A Coronavirus Bounce Back Loan?

The Bounce Back Loan Scheme (BBLS) allows small and medium businesses to borrow from £2,000 to £50,000 depending on their turnover. You cannot apply if you’re already applying for CBILS and a couple of other aids but usually, you’re eligible if you own a business that;

  • is based in the UK
  • was established before 1 March 2020
  • has been affected by the COVID-19 outbreak

You need to approach to of the 29 lenders participating in the scheme to apply, and you’re responsible for returning 100% of the loan.

The Bounce Back Loan Scheme closed to new applications and top-up applications on 31 March 2021.

5. Are There Any Coronavirus Business Support Grants For Your Employees? 

There are three types of financial aid if you’re not self-employed.

  • Coronavirus Job Retention Scheme: You can claim 80% of the monthly wages (with a maximum of £2,500 per month) of your employees if their working hours are disrupted because of the outbreak. This scheme is active until the end of September 2021 with some updates.
  • Kickstart Schemes: There are two Kickstart Schemes, one is for 30 or more employees, other is for 29 or fewer employees. Kickstart scheme grants funds to employers to create job opportunities for young people who are at risk of long term unemployment.
  • Coronavirus Statutory Sick Pay Rebate Scheme: You can claim back your employee’s sick pay if they have COVID-19 related sick leave.

6. What Are Other Types Of Financial Support You Can Get?

The financial aids vary from your business structure to how your business was affected by the pandemic. The government offers several opportunities for your VAT, Self Assessment payments, or delayed tax bills.