Oliver Elliot is a firm that specialises in company rescue and business recovery. We are fully Licensed and regulated by the ICAEW. The government has introduced a range of measures designed to help businesses survive and work safely through the Pandemic.
How Oliver Elliot can help:
- caring response and efficient service
- advice on furlough arrangements
- advice on bounce back loans
- wrongful trading suspension provisions explained
- insolvency advice about addressing breaches of duty
Contact us for a no obligation consultation
We have more than twenty years insolvency and business experience, resolving challenging business financial circumstances for both Directors and Creditors. Contact Us for a Free Initial Consultation.
020 3925 3613 / firstname.lastname@example.org
Solutions for Businesses affected by Covid-19
Where there is a will there is a way. Do not despair and do not bury your head in the sand. We can overcome adversity together.
Restart Grant Scheme
The Restart Grant Scheme supports businesses in reopening safely as COVID-19 restrictions are lifted. Grants have been available for eligible businesses from 1 April 2021.
The Kickstart Scheme
The Kickstart Scheme provides funding to create new jobs for 16 to 24 year olds on Universal Credit who are at risk of long term unemployment. Employers of all sizes can apply for funding.
Recovery Loan Scheme
The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close.
Debt Respite Scheme
Debt Respite Scheme (Breathing Space) will give someone in problem debt the right to legal protections from their creditors. There are two types of breathing space: a standard breathing space and a mental health crisis breathing space.
What Coronavirus (Covid-19) Business Recovery Help Is There Available?
The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close, providing support as businesses recover and grow following the disruption of the pandemic and the end of the transition period.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.
The scheme launches on 6 April and is open until 31 December, subject to review. Loans will be available through a network of accredited lenders, whose names will be made public in due course.
What type of finance is available
- Term loans and overdrafts will be available between £25,001 and £10 million per business.
- Invoice finance and asset finance will be available between £1,000 and £10 million per business.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
You will be able to apply for a loan if your business:
- is trading in the UK
You will need to show that your business:
- is viable or would be viable were it not for the pandemic
- has been impacted by the coronavirus pandemic
- is not in collective insolvency proceedings – further details will be provided in due course
Business that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.
Who cannot apply
Businesses from any sector will be eligible to apply, except:
- banks, building societies, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
How to apply
The scheme will launch on 6 April 2021. Further information will become available here.
There are many ways in which the Coronavirus has impacted on businesses and companies. Strict social distancing and two Lockdowns to date has stretched many businesses. The government has introduced a range of measures designed to help businesses survive and work safely through the Pandemic.
Nevertheless, many companies are now having to deal with the impact of a new Lockdown introduced in January 2021, which will further impact on their business and be looking at new ways to survive the crisis. If your business has trouble paying debts when they fall due it might be insolvent. It is important that you do no ignore this and take professional advice at the earliest opportunity to consider your options.
We can help you with your business if you are struggling to negotiate repayment terms with your creditors. We can consider a range of measures. We can help you with HMRC debts and organising Time To Pay Arrangements. We can also assist you with restructuring your business using either a Company Voluntary Arrangement or Administration or even a combination of the two. If however, you consider you are past the point of no return, then we can help you undertake an orderly winding up to close down your business, taking full control and freeing you of the burden of company debt, helping you put the company into Creditors Voluntary Liquidation.
Government Help: The Coronavirus Job Retention Scheme (Furlough)
The cornerstone of the government’s help was a scheme known as the Coronavirus Job Retention Scheme. The Furlough scheme arose by virtue of Sections 71 and 76 of the Coronavirus Act 2020.
The structure of the scheme was to enable companies to retain their employees as opposed to making them redundant. It enables companies to receive from the government 80% of an employees wages subject to a maximum cap of £2,500 per month.
In essence one of the central requirements of this scheme was that the employee must not work full stop the skiing was designed to save the employee used job that otherwise would have been lost as a consequence of covid-19.
The Coronavirus Job Retention Scheme has been extended now until the 30th of April 2021.
How Can I Claim Coronavirus Business Recovery Help?
In order to be eligible to claim on the scheme, employers must have confirmed to their employees in writing that they have been put on Furlough.
In order for this to happen steps must have taken to ensure that the agreement is consistent with employment, equality and discrimination laws Employers must keep a written record of the agreement for five years, keep records of how many hours the employees work and the number of hours they are Furloughed for.
The employee does not have to provide a response in writing and there is no requirement for the employer to place all employees onto the Furlough scheme.
Can Employees Work Whilst On Furlough?
However, employees that are on the Furlough scheme would not have been permitted to undertake any work whilst they were Furloughed on a full-time basis. Employees that were on the more flexible Furlough scheme could work for any amount of time and any working pattern but for the amount of time that the records show them down as being on Furlough for.
An employee that is on the flexible Furlough element of the scheme would need to agree to this position and the company should keep a written agreement confirming this arrangement was in place. There was no minimum Furlough period and the flexible Furlough agreement could last for any amount of time. Indeed employees could enter into a flexible.
The key point is that the hours during which the employee is recorded as being on Furlough cannot result in them doing any work for the organisation or providing any services. However, the employee can take part in training, volunteer to work for another employer organisation provided that was within the pre-existing terms of their employment contract.
Government Help: The Bounce Back Loan Scheme?
In addition, the government introduced the Bounce Back Loan Scheme (BBLS) which enables smaller businesses to access finance more quickly during the coronavirus outbreak.
The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.The government guarantees 100% of the loan and there are no fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
The scheme is open to applications until 31 March 2021.
If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must request the top-up by 31 January 2021.
Eligibility For A Bounce Back Loan
You can apply for a loan if your business:
- is based in the UK
- has an annual turnover of up to £45 million
- would be viable were it not for the pandemic
- has been adversely impacted by the coronavirus
If you want to borrow £30,000 or more, you also need to confirm that your business was not classed as a business in difficulty on 31 December 2019.
Who Cannot Apply For A Bounce Back Loan?
Businesses from any sector can apply, except:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
How Long Is A Bounce Back Loan For?
The maximum length of the facility depends on the type of finance you apply for and will be:
- up to 3 years for overdrafts and invoice finance facilities
- up to 6 years, for loans and asset finance facilities
Employment and Support Allowance (ESA)
ESA gives you money to help with living costs if you are unable to work and support to get back into work.
You can apply for ESA if you’re employed, self-employed or unemployed.
How To Claim ESA
It is worth checking if what type of ESA you might be eligible for before submitting your claim.
You will need:
- your National Insurance number
- your bank or building society account number and sort code (you can use a friend or family member’s account if you do not have one)
- your doctor’s name, address and telephone number
- details of your income if you’re working
- the date your Statutory Sick Pay (SSP) ends if you’re claiming it
If you’re applying because of coronavirus, you’ll also need:
- an ‘isolation note’ if you’re unable to work because of coronavirus
- your notification from the NHS or public health authorities if you’ve been told to self-isolate because you’ve come into contact with someone with coronavirus
- a letter confirming the date of your procedure if you’ve been advised to self-isolate before going into hospital for surgery
- a letter or ‘shielding note’ from your doctor or a health authority advising you or your child to shield (take extra precautions to reduce contact with others) because you’re at very high risk of severe illness from coronavirus
If your business has suffered as a result of the Coronavirus outbreak then you may be able to claim Universal Credit. It is to help you with your living costs.
You may be able to get it if you are on a low income, out of work or you cannot work.
Individual Voluntary Arrangement
If Covid-19 has left you in a position that you are struggling to pay your debts on time then it might be that an Individual Voluntary Arrangement might help. Unlike informal arrangements with creditors which are not binding on all of your creditors, an IVA might be the answer for you. It is a formal arrangement that could enable you to agree to a formal arrangement that is binding on all of your creditors, enabling you to make a set monthly affordable payment over a period of time to dispose of your debts by agreement.
Although often considered the option of last resort, if you are unable to pay your debts or enter into an IVA, then bankruptcy might be a viable option for you. It typically lasts twelve months, after which your debts are in effect written off. There are consequences of going into bankruptcy so it is not a decision to take lightly without professional advice to consider all of your options.
Even with the Furlough scheme you might find that a loss of 20% of your income, or receiving Statutory Sick Pay, is still leaving you unable to pay your debts. This could be also if you have existing debts and changes to your circumstances arising from Covid-19. If you are concerned about this then Contact Us to enable us to help you and guide you in the right direction.
You might also benefit from an IVA or consideration of bankruptcy. Even with the support of your Employer and the government help, you may still find yourself with a personal debt issue to resolve. If you are concerned about the impact on Covid-19 on your personal debts, speak to us as we can do so in confidence and you have no obligation. It is initially free and independent advice.