Originally written by Timothy Adler on Small Business
MPs have urged Rishi Sunak to extend the taxpayer-funded furlough scheme businesses with a chance of surviving the coronavirus crisis.
The Chancellor should “show flexibility” and target companies that are still viable when the existing furlough scheme ends in October, members of the Treasury select committee said.
The committee said the Chancellor should “carefully consider” whether a targeted extension was needed for the furlough scheme, which has protected 9.6m jobs to date at a cost of £35bn. The scheme will be wound up at the end of October. Some 11 per cent of the British workforce were on partial or full furlough in mid-August, according to a survey published on Thursday by the Office for National Statistics.
>See also: Where to find your £1,000 small business lockdown grant
The cross-party select committee said in its report on the economic impact of the COVID-19 pandemic, published today, that a large proportion of businesses in the sectors most affected by social distancing might have a long-term future.
“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the
Tag Archive for Coronavirus
Hot Business News Today
Small businesses should ‘only repay coronavirus debt once back in profit’
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small businesses should only repay state-backed coronavirus debt once they are back in profit, a centre-right thinktank has argued.
The taxman could claw back emergency COVID-19 funding once businesses are back trading at a profit, argues Onward.
This would be through a surcharge on taxable profits and shareholder salaries, paying off your Bounce Back Loan or Coronavirus Business Interruption Loan.
>See also: Where to find your £1,000 small business lockdown grant
The issue is pressing because, according to the ONS, one in five small businesses are already “zombie” companies – meaning the annual cost of servicing their business debt equals their profits.
And nearly one in 20 firms (4.3 per cent) are technically insolvent with liabilities greater than their assets, due to the levels of debt they have already built up since March. These firms employ an estimated 1.8m workers.
Debt levels have leapt during this year’s lockdown as businesses tapped the government’s emergency loan schemes to meet costs, leaving many overburdened with debt. About £53bn has been loaned to small and medium-sized businesses finance industry lobby group The CityUK estimates that £35bn may not be repaid.
>See also: Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
The
Hot Business News Today
MPs back call for ‘targeted’ extension of furlough scheme
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
MPs have urged Rishi Sunak to extend the taxpayer-funded furlough scheme businesses with a chance of surviving the coronavirus crisis.
The Chancellor should “show flexibility” and target companies that are still viable when the existing furlough scheme ends in October, members of the Treasury select committee said.
The committee said the Chancellor should “carefully consider” whether a targeted extension was needed for the furlough scheme, which has protected 9.6m jobs to date at a cost of £35bn. The scheme will be wound up at the end of October. Some 11 per cent of the British workforce were on partial or full furlough in mid-August, according to a survey published on Thursday by the Office for National Statistics.
>See also: Where to find your £1,000 small business lockdown grant
The cross-party select committee said in its report on the economic impact of the COVID-19 pandemic, published today, that a large proportion of businesses in the sectors most affected by social distancing might have a long-term future.
“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the
Hot Business News Today
Where to find your £1,000 small business lockdown grant
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The government has announced a new £1,000 small business grant for any small business in England affected by a local lockdown.
Businesses that are forced to shut because of local COVID-19 lockdowns will be able to claim up to £1,500 per property every three weeks.
Local authorities will administer the new small business local lockdown grant. You can find the full list of local authorities here.
See also: How to claim your £1,500 Kickstart Scheme grant
If a business occupies a premises with a rateable value less than £51,000 or occupy a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, it will receive £1,000.
If a business has a rateable value more than £51,000 or part of a property subject to an annual rent or mortgage payment of more than £51,000, it will receive £1,500.
Extra discretionary funding
Local authorities will also receive an additional 5 per cent top up amount of business support funding to enable them to help any other small business affected by local lockdown which may not be on the business rates list. Payments made to businesses from this local authority discretionary fund can be any
Hot Business News Today
Small businesses should ‘only repay coronavirus debt once back in profit’
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small businesses should only repay state-backed coronavirus debt once they are back in profit, a centre-right thinktank has argued.
The taxman could claw back emergency COVID-19 funding once businesses are back trading at a profit, argues Onward.
This would be through a surcharge on taxable profits and shareholder salaries, paying off your Bounce Back Loan or Coronavirus Business Interruption Loan.
>See also: Where to find your £1,000 small business lockdown grant
The issue is pressing because, according to the ONS, one in five small businesses are already “zombie” companies – meaning the annual cost of servicing their business debt equals their profits.
And nearly one in 20 firms (4.3 per cent) are technically insolvent with liabilities greater than their assets, due to the levels of debt they have already built up since March. These firms employ an estimated 1.8m workers.
Debt levels have leapt during this year’s lockdown as businesses tapped the government’s emergency loan schemes to meet costs, leaving many overburdened with debt. About £53bn has been loaned to small and medium-sized businesses finance industry lobby group The CityUK estimates that £35bn may not be repaid.
>See also: Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
The
Hot Business News Today
Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Lloyds has been named and shamed with for forcing small businesses to open paid-for business current accounts to access Bounce Back Loans.
The competition watchdog said that Lloyds, one of the largest in the small business market, treated small companies unfairly by requiring them to open an account to draw down state-backed Bounce Back Loans.
The Competition and Markets Authority that 30,000 customers who had been running their businesses using personal accounts were told by Lloyds and its Bank of Scotland arm that they must open a business account to access Bounce Back Loans.
>See also: Banks ‘will be pushed’ into closing down SMEs unable to repay Covid debt
The scheme, which has underwritten £35.5bn of credit, provides lenders with a 100-per-cent state guarantee on low-interest loans to qualifying small companies. High street banks, rather than the government, have to provide the working capital.
Back in 2002, Lloyds agreed not to ask personal account customers to open a separate account if they wanted to borrow money from the bank – a practice known as “bundling”.
But when it came to Bounce Back Loans, Lloyds asked existing customers operating their firms out of personal accounts to open fee-charging business accounts
Hot Business News Today
Where to find your £1,000 small business lockdown grant
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The government has announced a new £1,000 small business grant for any small business in England affected by a local lockdown.
Businesses that are forced to shut because of local COVID-19 lockdowns will be able to claim up to £1,500 per property every three weeks.
Local authorities will administer the new small business local lockdown grant. You can find the full list of local authorities here.
See also: How to claim your £1,500 Kickstart Scheme grant
If a business occupies a premises with a rateable value less than £51,000 or occupy a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, it will receive £1,000.
If a business has a rateable value more than £51,000 or part of a property subject to an annual rent or mortgage payment of more than £51,000, it will receive £1,500.
Extra discretionary funding
Local authorities will also receive an additional 5 per cent top up amount of business support funding to enable them to help any other small business affected by local lockdown which may not be on the business rates list. Payments made to businesses from this local authority discretionary fund can be any
Hot Business News Today
Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Lloyds has been named and shamed with for forcing small businesses to open paid-for business current accounts to access Bounce Back Loans.
The competition watchdog said that Lloyds, one of the largest in the small business market, treated small companies unfairly by requiring them to open an account to draw down state-backed Bounce Back Loans.
The Competition and Markets Authority that 30,000 customers who had been running their businesses using personal accounts were told by Lloyds and its Bank of Scotland arm that they must open a business account to access Bounce Back Loans.
>See also: Banks ‘will be pushed’ into closing down SMEs unable to repay Covid debt
The scheme, which has underwritten £35.5bn of credit, provides lenders with a 100-per-cent state guarantee on low-interest loans to qualifying small companies. High street banks, rather than the government, have to provide the working capital.
Back in 2002, Lloyds agreed not to ask personal account customers to open a separate account if they wanted to borrow money from the bank – a practice known as “bundling”.
But when it came to Bounce Back Loans, Lloyds asked existing customers operating their firms out of personal accounts to open fee-charging business accounts
Hot Business News Today
Banks ‘will be pushed’ into closing down SMEs unable to repay Covid debt
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Banks will be pushed into foreclosing on small businesses unable to repay Covid debt, a City insider has warned.
This is because foreclosing on SMEs unable to repay emergency coronavirus loans will be the only way banks can trigger the government’s guarantee to repay bad Covid debt. Banks would have to prove a loss before they can claim on the guarantee.
The government’s lending schemes have provided nearly £53bn to some 1.2m companies, including £35.5bn worth of bounce back loans — which include a 100 per cent guarantee for small business loans – and £13.7bn through the coronavirus business interruption loan scheme (CBILS).
The Office for Budget Responsibility has warned that in a worst-case scenario, £35bn of the Covid debt will never be repaid. The banks themselves believe that up to half of bounce back loans alone will never be repaid.
A Business Banking Resolution Service survey in May discovered that nearly half of small businesses that have taken out government emergency coronavirus loans do not intend to repay them.
The Treasury has turned a deaf ear to a City of London push for it to set up a bad COVID-19 debt bank, an idea proposed by Lord
Hot Business News Today
Banks ‘will be pushed’ into closing down SMEs unable to repay Covid debt
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Banks will be pushed into foreclosing on small businesses unable to repay Covid debt, a City insider has warned.
This is because foreclosing on SMEs unable to repay emergency coronavirus loans will be the only way banks can trigger the government’s guarantee to repay bad Covid debt. Banks would have to prove a loss before they can claim on the guarantee.
The government’s lending schemes have provided nearly £53bn to some 1.2m companies, including £35.5bn worth of bounce back loans — which include a 100 per cent guarantee for small business loans – and £13.7bn through the coronavirus business interruption loan scheme (CBILS).
The Office for Budget Responsibility has warned that in a worst-case scenario, £35bn of the Covid debt will never be repaid. The banks themselves believe that up to half of bounce back loans alone will never be repaid.
A Business Banking Resolution Service survey in May discovered that nearly half of small businesses that have taken out government emergency coronavirus loans do not intend to repay them.
The Treasury has turned a deaf ear to a City of London push for it to set up a bad COVID-19 debt bank, an idea proposed by Lord