A government briefing today (March 17) has promised a £330 billion package of financial measures to support businesses during the coronavirus crisis.
The measures include a government backed loan scheme with no interest for six months due to be running from next week; support for airlines and airports; cash grants up to £25,000 for businesses without insurance; assurance that those with insurance are covered and eligible for payments and no business rates fr 12 months for hospitality, leisure and retail trades.
Small businesses will be eligible for grants up to £10,000, three month mortgage holidays for affected companies and further welfare funding.
Chancellor of the Exchequer, Rishi Sunak, said: “I can announce today an unprecedented package of government-backed and guaranteed loans to support businesses to get through this.
“Today, I am making available an initial £330 billion of guarantees – equivalent to 15% of our GDP.
“That means any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms. And if demand is greater than the initial £330 billion I’m making available today, I will go further and provide as much capacity as required.
“That support will be delivered through two main schemes:
- to support liquidity amongst larger firms, I have today agreed a new lending facility with the Governor of the Bank of England to provide low cost, easily accessible commercial paper
- to support lending to small and medium sized businesses, I am extending the new Business Interruption Loan Scheme I announced at the Budget last week, so that rather than loans of £1.2 million, it will now provide loans of up to £5 million, with no interest due for the first six months
Both of these schemes will be up and running by the start of next week.
And I am also taking a new legal power in the Covid Bill to offer whatever further financial support I decide is necessary.
Some sectors are facing particularly acute challenges. In the coming days, my colleague the Secretary of State for Transport and I will discuss a potential support package for specifically airlines and airports.
And yesterday, I asked my Cabinet colleagues to urgently convene meetings over the coming days with business leaders and representatives in the most affected sectors, to identify other specific opportunities to support them and their industries, including possible regulatory forbearance.
Second, as well as access to finance, businesses need support with their cashflow and fixed costs.
Following the changed medical advice yesterday, there are concerns about the impact on pubs, clubs, theatres and other hospitality, leisure and retail venues.
Let me confirm that, for those businesses which do have a policy that covers pandemics, the government’s action is sufficient and will allow businesses to make an insurance claim against their policy.
But many of those businesses don’t have insurance – so we will go further.
I announced last week that for businesses in the retail, hospitality and leisure sectors, with a rateable value of less than £51,000, they will pay no business rates this year.
Today, I can go further and provide those businesses with an additional cash grant of up to £25,000 per business – to help bridge through this period.
Additionally, I also am today extending the business rates holiday to all businesses in those sectors, irrespective of their rateable value.
That means every single shop, pub, theatre, music venue, restaurant – and any other business in the retail, hospitality or leisure sector – will pay no business rates whatsoever for 12 months, and if they have a rateable value of less than £51,000, they can now get a cash grant as well.
I also announced last week that we would be providing £3,000 cash grants to the 700,000 of our smallest businesses.
In light of the new circumstances, and to support their cash flow, today I can increase those grants to £10,000.
Taken together, on top of the unlimited lending capacity I have already announced, this is a package of tax cuts and grants, in this financial year, worth more than £20 billion.
That comes on top of the existing multi-billion-pound package I set out at Budget, which included reimbursing small and medium sized companies for the cost of statutory sick pay.
Local authorities in England will be fully compensated for the costs of these measures, and the devolved administrations will receive at least £3.5 billion in additional funding as a result to provide support to businesses in Scotland, Wales and Northern Ireland.
Third, I will strengthen our support for peoples and individuals.
At Budget last week, I committed £1 billion to support the financial security of vulnerable people, through a half billion boost to the welfare system, and a half billion pound Hardship Fund for Local Authorities.
Following discussions with industry today, I can announce that for those in difficulty due to coronavirus, mortgage lenders will offer at least a three month mortgage holiday – so that people will not have to pay a penny towards their mortgage while they get back on their feet.
And in the coming days, I will go much further to support people’s financial security. In particular, I will work with trade unions and business groups to urgently develop new forms of employment support to help protect people’s jobs and incomes through this period.”
Local businesses supporting each other
A coronavirus support group for Thanet businesses has been set up on facebook as local independents look to support each other.