Budget 2021: Giving businesses a kick start
Posted on: March 3rd 2021 · read
Today the Chancellor announced a package of measures aimed helping businesses get back on their feet.
From 6 April 2021 to 31 December 2021 businesses will be able to apply for a new type of loan through ‘The Recovery Loan Scheme’ which replaces the existing COVID loan schemes which closes on 31 March 2021.
The government will guarantee 80% of the loan and for loans below £250,000 there is no requirement for a personal guarantee, nor can the borrower’s home be taken as security.
The loan can be used for growth and investment and is available as:
- Term loans and overdrafts between £25,001 and £10 million per business
- Invoice finance and asset finance between £1,000 and £10 million per business.
Term loans and asset finance facilities can have a term of up to 6 years, with 3-year terms for overdrafts and invoice finance facilities.
Business can apply to accredited lenders for the loans if they are trading in the UK and have been affected by the Covid-19 pandemic. All businesses can apply except for Banks, building societies, insurers, public sector, and state funded primary and secondary schools.
Prior to the Covid-19 pandemic high street shops were already struggling with the uptake of online shopping, but then Covid-19 struck, and most businesses have been forced to close for long periods during lockdown, with the notable closure of some big brands.
To help the high street shops can apply for a grant to reopen of up to £6,000 through a £5 billion Restart Grant. The amount each business will receive will be based on their rateable value.
There is a larger grant of up to £18,000 for hospitality, leisure, personal care, and gym businesses.
The Covid-19 pandemic has had a big impact on young people aged between 16 and 24 years. The unemployment rate increased by 2.1%, an increase of 66,000. The government has addressed this issue by increasing the payment made to businesses which take on an apprentice from £1,500 per hire (25 years and over, £2,000 for 16- to 24-year-olds) to £3,000 per hire. The payment can be used for anything to support the businesses costs, such as apprentice’s salary.
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