What external help can COVID stricken businesses receive?
Government schemes
Here is a list of the current support available to businesses and the self-employed during the pandemic as at the 4th January 2021:
- Local Restrictions Support Grant (LRSG (Open) but trade affected) – this is only for tier 2 & 3 businesses in England but can be claimed retrospectively if you haven’t claimed yet – claim through your Local Authority
- The Local Restrictions Support Grant (LRSG (Closed) Addendum) for businesses in England who were instructed to close between the 5th November and the 2nd December 2020. It is expected that this scheme will be used for the new grants announced on the 4th January – claim via Local Authority
- The Additional Restrictions Grant (ARG) for businesses in England who do not pay business rates (discretionary criteria set by each local authority) – claim via Local Authority
- Furlough remains at 80% wages – extended to 30th April – claim via HMRC website
- Bounce Back Loans can be topped up to a max of 25% turnover, applications have been extended to 31st March 2021
- CBILS & CLBILS also extended to 31st March 2021
- SEISS grants for self-employed unincorporated businesses
- Universal Credit for self-employed
- An expansion of the HMRC ‘Time To Pay’ scheme for businesses struggling to pay their tax bills on time
External help
Having considered the above, the owners and directors will be better able to assess whether or not they can fix the business themselves, whether they need assistance from their trusted external advisors, or whether the business is insolvent and they need to instruct an Insolvency Practitioner to advise on the appropriate process to help them rescue or close the business.
If the business is insolvent the answers to the above questions will also help the instructed Licensed Insolvency Practitioner to advise on the options available to the owners and director(s). If the business is insolvent and profitability cannot be restored then the business will have to close:
- The closure of an insolvent sole trader business may result in the owner having to consider entering into bankruptcy or an individual voluntary arrangement (“IVA”)
- The closure of a traditional partnership may involve the individual partners having to consider personal bankruptcy or entering into IVA’s.
- The closure of an insolvent company will require the directors to decide whether it should be placed into creditors voluntary liquidation (“CVL”) or compulsory liquidation (“CL”)
- The closure of an insolvent limited liability partnership (“LLP”) will require the members to decide whether it should be placed into creditors voluntary liquidation (“CVL”) or compulsory liquidation (“CL”)
Chamberlain & Co can assist you with your business recovery from COVID-19, our licensed insolvency practitioners and advisory specialists are committed to delivering high-quality service and value to clients in all industries.
