By Richard Pepler, CEO Optimum Finance
“UK Plc is facing a challenge like never before and the issues we now face are not just about caring for our nearest and dearest and deciding when to self-isolate but about how to cover our personal and professional outgoings as we enter a period of exceptional uncertainty.
Yesterday’s daily briefing focused on the impact on the economy and the Government’s response, to summarise here’s what you need to know if you’re one of the 5.9 million SMEs in UK:
- Following on from last week’s Budget SSP refunds to businesses remain – however, much criticism has been levied at this given the low rate of SSP at £94.25 per week. With an average household income in the UK of £29,400 (source: ONS), average monthly rent outside London of £700 (source: ONS) and average monthly mortgage payments of £669 (source: This is Money) this will not go far.
- Loans have been extended for the very smallest businesses – now available up to £10,000 (up from last week’s announcement of £3,000). However, loans need to be repaid back and, given the uncertain outlook faced by businesses on when this crisis will subside and they can start earning again, taking a loan and increasing debt is not a hugely comfortable position to consider. There is also not yet enough clarity around how quickly this financial support can be accessed and time is of the essence.
- For retail and hospitality businesses, there will be a 12-month business rates holiday and they will be able to access grants up to £25,000 (which will not need to be repaid). The Government has also confirmed that for those operators in this sector which have insurance, that they will be covered for business interruption.
- Mortgage payment holidays of three months have been announced for those most affected by this crisis – how people go about accessing this has not been announced.
I have worked with business owners my whole career and have worked through may different challenging times as a business owner myself but I have never experienced anything of this nature. What I do know is that the business community needs decisive action, clarity and strong direction to overcome what we now face.
I hope the Government will go further in its steps and support people with clear and prompt guidance on accessing measures. There is still some way to go with business support in my view as the current action plan still means many SMEs will fall through the cracks without stronger and more flexible funding.
We’re doing our bit and are extending our funding lines to help businesses which need immediate support – everything we do can be done remotely and we are the only business in our sector with a complete digital solution.