We have been working closely with a great number of clients over the course of the two weeks to answer the numerous questions around the support they can access and are entitled to during the Covid-19 pandemic.
There has been considerable uncertainty, fuelled by the distinct lack of the detailed information which goes alongside the initial government announcements.
Everybody rushes off to interpret things as best as possible, but when the clarification arrives a few days later, it has in some cases, gone completely against what was originally thought.
- Even now, two weeks on, there is still a lack of clarity around furloughing, specifically with question marks around sole directors. The treasury unofficially said sole directors could be furloughed, but it would be good to see that down in black and white!
The measures introduced for the self-employed are good, but questions remain around the definition of ‘self-employed’. For example at the moment we are assuming that landlords will be included, but that hasn’t been made clear.
It’s no wonder that nearly a million people have signed up to Universal Credit over the last two weeks if the self-employed won’t get their funding until June.
Similarly, the restrictions on the self-employed having an upper earnings limit doesn’t seem fair and isn’t equitable.
- We launched our Burgis & Bullock funding portal for CBILS loans which is a big help and we’re seeing a big uptake from clients on that.
In the main there has been a fairly slow roll-out from funders for these loans because they have to go through normal credit and lending criteria. But we have also seen businesses apply and be accepted two days later, which shows it can be done quickly.
The measures have certainly had a positive impact though, only two weeks ago we were having a considerable number of conversations about businesses winding up and making people redundant. But the Job Retention Scheme (JRS) has certainly made a difference.
But again, none of that money from the scheme has come through yet and not uncommonly businesses weren’t able to meet their full March payroll commitments.
- The technology and bureaucracy shouldn’t hold it up. There could be up to one million businesses that could go bust by the end of this, unless they get the money flowing quickly.
There are definitely gaps in the government funding and we would expect some relaxation of the rules around existing measures introduced to plug these gaps.
It’s expected that the Chancellor will remove the requirement for banks to offer conventional funding before CBILS is considered, also removing the Personal Guarantee requirement on loans under £250,000 for ALL lenders.
- We’re starting to get 12 month and beyond forecast requests now. Many business owners are taking this opportunity to take a long hard look at their business.
The big questions now are around timing and when the funding will arrive.
Confusion doesn’t help anybody, but in these uncertain times Burgis & Bullock are available to help talk you through any concerns you may have.
Stay safe and stay positive!