Local lockdown restrictions

Local lockdown restrictions – what does it mean for business?

Understanding additional restrictionsEarlier this week, Matt Hancock has announced a series of further measures and tighter UK lockdown restrictions in numerous areas of the country. These so-called ‘local restrictions’ will only effect certain areas of England, including North East Derbyshire, Chesterfield, London, Essex, Elmbridge and Barrow-in-Furness.

There is now a new three tiered-system which has been implemented into the UK. This basically means that different areas will be under different lockdown restrictions, as some places are at more of a risk than others. Expect there to be some chop and change going on with this system as time moves forward and certain areas find themselves with either higher or lower Covid-19 infection rates.

With more restrictions comes further difficulties for business owners across the UK. If you’re the owner of a business venture in an area that has been placed into either tier 2 or especially tier 3, you’re likely thinking that you’re out of options. Though, we want you to know not only how this may affect your business, but also what you can do about it in terms of financials.

Of course, like everything else with the pandemic, nothing is straight forward and easy to understand, so naturally these new lockdown restrictions have different effects on different types of businesses.

Understanding additional restrictions

Your businesses will either be located in a Tier 1 area, a Tier 2 area or a Tier 3 area, though none of these mean a low risk of infection. We will walk you through each of the Tiers below:

(Tier 1 – Medium risk) 

  • The rule of six is still in effect, meaning there are to be no socialising with groups larger than six people either indoors or outdoors.
  • Tradespeople are not counted in the rule of six and can still travel to households to complete work.
  • Businesses and venues can continue to operate but pubs and restaurants must ensure customers only consume food and drink while seated, and must remain closed between 10pm and 5am every day.
  • Takeaway food can continue to be sold after 10pm if ordered by phone or online.
  • Schools and universities remain open.
  • Places of worship remain open but people must not mingle in a group of more than six.
  • Weddings and funerals can go ahead with restrictions on the number of people who can attend (15 and 30 respectively).
  • Exercise classes and organised sport can continue to take place outdoors, and – if the rule of six is followed – indoors.

So, as you can probably tell, the Tier 1 system is something we’re all familiar with as we’ve pretty much been living this way for the past 6-7 months. From here on in, things start to get a little bit different to the way we’ve all been living previously.

(Tier 2 – High risk)

  • People are prohibited from socialising with anybody outside their household or support bubble in any indoor setting.
  • Tradespeople can continue to go into a household for work.
  • The rule of six continues to apply for socialising outdoors, for instance in a garden or public space like a park or beach.
  • Businesses and venues can continue to operate but pubs and restaurants must ensure customers only consume food and drink while seated, and close between 10pm and 5am.
  • Takeaway food can continue to be sold after 10pm if ordered online or by phone.
  • Schools and universities remain open.
  • Places of worship remain open but people must not mingle in a group of more than six.
  • Weddings and funerals can go ahead with restrictions on the number of people who can attend (15 and 30 respectively).
  • Exercise classes and organised sport can continue to take place outdoors but will only be permitted indoors if it is possible for people to avoid mixing with those they do not live with (or share a support bubble with), or for youth or disability sport.
  • Travel is permitted to amenities that are open, for work or to access education, but people are advised to reduce the number of journeys where possible.

Here you can see that areas in Tier 2 have some further restrictions that effect businesses of all shapes and sizes. People cannot socialise with others in an indoor setting that are not in their support bubble or part of their household. Pubs and bars can still open as long as all customers remain seated and are served via table service.

(Tier 3 – Very high risk)

  • People are prohibited from socialising with anybody they do not live with, or have not formed a support bubble with, in any indoor setting, private garden or at most outdoor hospitality venues and ticketed events.
  • Tradespeople can continue to go into a household for work.
  • The rule of six continues to apply to outdoor public spaces, such as parks, beaches, public gardens or sports venues.
  • Pubs and bars are only permitted to remain open to operate as restaurants, in which case alcohol can only be served as part of a substantial meal.
  • Schools and universities remain open.
  • Places of worship remain open but household mixing is not permitted.
  • Weddings and funerals can go ahead with restrictions on the number of people attending (15 and 30 respectively) but wedding receptions are not allowed.
  • The rules for exercise classes and organised sport are the same as in tier 2. They can continue to take place outdoors but will only be permitted indoors if it is possible for people to avoid mixing with people they do not live with (or share a support bubble with), or for youth or disability sport. However, in Merseyside, gyms were ordered to close when it entered tier 3.
  • Travelling outside a very high alert level area or entering a very high alert level area should be avoided other than for things such as work, education or youth services, to meet caring responsibilities or if travelling through as part of a longer journey.
  • Residents of a tier 3 area should avoid staying overnight in another part of the UK, while people who live in a tier 1 or tier 2 area should avoid staying overnight in a very high alert level area.

From this you have probably gathered that businesses within tier 3 areas will be facing a phenomenal struggle to remain in business. They will likely all be heavily reliant on government funding; such as grants that don’t need to be paid back in the future. Though, those said grants may be particularly difficult to get your hands on, as we’ve seen the government struggle to keep up with demand earlier in the year, also.

What you can do 

Here are a few things you can do to try and keep your business afloat if you’re located in one of the higher tiered areas of the country.

Apply for a government business grant

You should most certainly look into the government-made Coronavirus Business Support scheme, which is designed to aid businesses that are effected by the virus, via a boost in financials.

As we’ve stated before, it may be difficult to get through and actually gain access for a grant that doesn’t need to be repaid, due to the extremely high demand, though it is still worth trying your best to do so.

Make those connections with customers

All business owners will now likely be feeling a little warier about how they’ll proceed now and in the future, if these restrictions stay in place. Remember to communicate with your customer base and get consumers of our business prepared for what’s to come. You can do this in the form of a social media post, an email chain, etc.

As long as people know what you have in mind, they’ll likely want to help to see you through the pandemic any way that they can and you’ll be staying at the forefront of their minds by making it clear that you’re opening up a communication stream between your business and all clients, customers and consumers.

Businesses will ultimately begin to rely on connection with their audiences in an online space, so if you’re an offline-only company, you may want to consider looking into how you can take things onto the internet in the near future.

Update: UK lockdown 2

A second full national lockdown is beginning in England from Thursday November 5th. This is yet another troubling piece of information for business ventures across the country, as they will have to contend will a further month of being unable to trade. The vast majority of businesses are deemed unessential, such as gyms, pubs, restaurants, retail stores, etc. For these, a temporary complete closure is on the way.

However, for businesses that are deemed essential, such as supermarkets and pharmacies, things will be able to go ahead as they did in the previous lockdown which took place this spring/summer. It is also worth noting that all educational sites, including both schools and universities will remain open on a full-time basis this time around and takeaway and delivery services will be allowed to function fully, as long as they stick to government social distancing guidelines.

The challenges will have been particularly hard-hitting for small businesses, as unlike the giant corporations, they don’t have a huge resource of funds to fall back on while they are no longer earning a decent level of cashflow. This is why we will witness many small and independent business unfortunately having to close down.

The furlough scheme set to be continued

It seems as though the furlough scheme is set to be extended by a further month in order to help out those businesses that need it the most. Therefore, if your business must once again close during this lockdown, you’ll be able to furlough your members of staff and allow the government to cover the costs of 80% of their respective wages.

You should focus some of your efforts on sourcing all the financial aid you can get from the government during this time, including grants the don’t require repayments. These are essential for the business owners that are going through some real turmoil during the time of lockdown.

What the future now likely holds

Unfortunately, many businesses will likely collapse before this virus reaches its end, especially the smaller local ventures that rely heavily on public footfall to keep them afloat. Though this is unfair and quite frankly cruel, it is the harsh reality we’re living in at the moment. By following our advice and taking a chance on some of the information we have provided you with above, you’ll give yourself a great chance of making it through and coming out of the other side with your head held high from a business point of view.

If worst comes to worst, this extended lockdown that’s about to begin will continue on into next year, before we eventually see an easing of the newly added restrictions. Though, for now we can simply hope this will not be the case and that our businesses will once again be allowed to function in a way that is a little closer to normality.

Here’s to hoping that 2021 is the year that brings with it the end of the Coronavirus pandemic and the return of a bustling economy, with the return of business ventures from all sectors of industry and of all shapes and sizes. The more information a business owner arms themselves with in regards to the ongoing developments of the COVID-19 lockdown, the readier they’ll be to deal with it.

Turn to alternative business finance

Unsecured business loans may be something you wish to look into if you’re in search of a fast funding solution to your financial problems.

Merchant Cash Advance or Business Cash Advance is a short-term funding solution that is widely available to small and independent businesses online in today’s society. Rather than making payments at a fixed monthly rate, you’ll be paying back an agreed-upon percentage of your customer card payment takings. This basically means that you’ll only be paying the loan back when you’re making money as a business.

This is best suited to seasonal businesses that experience varying customer interaction rates throughout the year and companies that need short-term funding that is easily repayable. You should know that it doesn’t matter if you have a negative credit history when it comes to Merchant Cash Advances, as you can use your card takings as security.

This source of finance comes with a single fixed amount to repay that never changes, so you’ll always know exactly how much you owe and how close you are to fully repaying the loan. Also, repayments are very flexible as they’re based on the money you earn as a business through your customer card sales (cash takings are unaffected). If your business begins to boom you’ll make repayments faster and therefore owe money for less time, whereas if you’re continuing to struggle as a business, you’ll have a much longer time to pay the money back. When repaying a Merchant Cash Advance, you’ll never have to worry about hidden fees or charges, as there isn’t any.

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