With the second wave of Coronavirus set to hit the UK in the near future and a subsequent second lockdown undoubtedly on its way, it could prove to be an extremely testing time, even for those businesses that managed to survive through the spring and summer months of 2020.
The UKs redundancy level is at the highest it has been since 2009 and times are set to become even tougher, so for the business owners out there that may be worried about what the future has in store for them, it’s great to know what financial options are available to you right now.
Prime Minister Boris Johnson has stated that a second nationwide lockdown would be disastrous. The rule of six was recently implemented to battle against the idea that this proposed outcome could become a reality in the near future, though if it fails to make progress, we may be left with little to no choice.
Second UK lockdown
The reopening of schools and universities across the country is only going to add to the pandemic problems, which could become highly unstable over the next few months. The fact of the matter is that is the infection rate of the virus skyrockets in the near future, it will largely be down to the reopening of educational sites such as schools. This leads us further into the idea that Boris Johnson acted far too rashly and thoughtlessly when attempting to get the economy back up and running once again, as the reopening of pubs and restaurants will also have played a large part in the continuous spreading of the disease.
This is what lead the eat out to help out scheme coming across so controversially, as grouping large numbers of people into a confined space, such as a small restaurant, is never going to be a good idea when there’s a life-threatening disease at large.
When did the second national lockdown in the UK start?
The second national lockdown in England – otherwise known as “lockdown 2” – came into force earlier this month on November 5. He said: “It is crucial to grasp this that the general threat to public health comes not from focusing too much on Covid, but from not focusing enough, from failing to get it under control.
The Prime Minister recently announced that England will go into a second national lockdown, after saying in previous weeks that this wasn’t necessary. Why has the PM changed his mind, how long will the lockdown last, and what will happen after this lockdown?
Why did the Prime Minister change his mind about a national lockdown?
At the beginning of the press conference on Saturday (31 October), Chris Whitty, the Chief Medical Officer, and Patrick Vallance, the Government’s Chief Scientific Advisor, ran through various sources of data the Government has been looking at to help them decide how to handle the next stage of the epidemic.
Is it the same as the first lockdown?
No, but it will be very familiar. Pubs, restaurants and non-essential shops will close, along with entertainment and leisure venues – including gyms – as well as hairdressers and beauty salons, and the axe will fall on all amateur sport.
As before, takeaways and food deliveries will be allowed, as will click-and-collect services. Mixing with other households inside homes will be outlawed and travel allowed for specific purposes only, for work, education, healthcare, to shop for essentials and to care for vulnerable people.
What are the differences?
The big one is that schools, colleges and universities will remain open. Also, people will be allowed to meet with one person from another household and sit with them in a park (winter weather permitting, with social distancing – but not in private gardens) and elite sport will continue – so the Premier League will not be suspended.
You’re going to need to forge your own business destiny
This next year is most certainly going to be extremely difficult for the vast majority of businesses out there, especially for those of us that are running physical stores which rely on footfall and customers actually entering a shop to make a purchase. Unlike the last time a lockdown was implemented, however, you’ll have an idea of what to expect this time around. One of the first things you’re likely to be aware of is that you’ll need some back-up funds to ensure your business makes it through the upcoming lockdown period.
One way of doing this is to consider your alternative business funding options, such as unsecured business loans and merchant cash advances, all of which can be accessed online today.
How will a second lockdown affect your business?
Firms that survived the first lockdown are bracing themselves for yet more hardship after the Government announced the country will return to national measures on Thursday, until at least December 2.
Under the latest rules, household mixing will be banned across England, non-essential shops, pubs, restaurants and hairdressers will close, and people will only be able to leave home for exercise, to buy essentials, for medical reasons, for education, or to go to work where they cannot work from home.
The furlough scheme, due to close on November 1, will be extended for a further month, covering 80pc of wages capped at £2,500 per month before tax.
But the extension has been attacked by Britain’s big business groups amid warnings that uncertainty over the duration of a second lockdown risks unleashing a wave of job losses and corporate failures this autumn.
Lockdown grants for Business in the UK
The government has released details of grants for businesses affected by the second lockdown in England running from 5 November until 2 December. The grants are being administered by local authorities.
Local Restrictions Support Grants (Closed)
This grant is for businesses with premises forced to close for a minimum 14 days due to the second lockdown and other coronavirus restrictions.
- Businesses occupying premises with a rateable value over £15,000 and less than £51,000 on the date the local restrictions started will receive a payment of £2,000 per 28-day qualifying restriction period. Businesses will be paid £1,000 every 14 days.
- Businesses occupying premises with a rateable value of exactly £51,000 or above on the date the local restrictions started will receive £3,000 per 28-day qualifying restriction period. Businesses will be paid £1,500 every 14 days.
This funding is available for businesses required to close due to restrictions that had their first full day of restrictions on or after the 9 September which means businesses required to close in tier 2 and 3 areas before the national lockdown began are eligible for the grants.
Local Restrictions Support Grant (Open)
This grant is for businesses that are not legally required to close but which are severely impacted by the lockdown restrictions on socialising. The government said local authorities should provide grant funding under the following tiers, unless there is a local economic need to deviate:
- Grants of up to £934 per 28-day period for businesses occupying premises with a rateable value of exactly £15,000 or under on the date the local restrictions started.
- Grants of up to £1,400 per 28-day period for businesses occupying premises with a rateable value over £15,000 and less than £51,000 on the date the local restrictions started.
- Grants of up to £2,100 per 28-day period for businesses occupying premises with a rateable value of exactly £51,000 or above on the date the local restrictions started.
The government guidance says it “would expect the funding to be targeted at hospitality, hotel, bed & breakfast and leisure businesses” but “we want local authorities to exercise their local knowledge and discretion and we recognise that economic need will vary across the country. Therefore, while we are setting suggested criteria for the funding, we are allowing local authorities to determine exactly which businesses to support.”
Alternative funding methods for your business
You may not yet have considered the vast amount of alternative business funding methods that are available directly to you online. In the past, alternative business finance providers were hard to find and might have had a specific product or sector they specialised in. There’s a huge variety of alternative business finance lenders and dozens of products available.
If your chosen way of taking payment from customers is via card payment terminals, merchant cash advances could provide many benefits to your venture. Merchant cash advances offer a cash based lump sum based on the business monthly card sales. The amount offered up front is generally up to a month’s revenue. This straightforward modern way of borrowing is a good fit for small and medium sized businesses that take a high number of low-value transactions.
The majority of retail companies use some sort of card payment terminals, making up for a large percentage of sales. Credit and Debit card payments can be tracked and analysed easily by yourself and the advance provider. This is one of the main advantages to using a merchant cash advance as an option for funding.
Alternative business funding in the UK
With quick turnaround rates of around 48 hours, it is a preferred funding option to 65% of merchant business owners across the United Kingdom. Partnering with PDQ Funding, one of the UK’s leading Cash Advance company, you are safe in the knowledge we have your best interests at heart.
Many business owners deem traditional bank loans as ‘one-dimensional’ and out of touch with the small business and SME’s. With a conventional bank loan, there are standard requirements such as business plans, forecasts, personal security guarantees and a never-ending amount of application paperwork.
As the high street banks continue to cut back on the availability of business finance, none traditional funding providers have stepped in to offer a wide variety of different products that are aligned with modern businesses. Working capital can be used to invest in new premises, refurbish an existing property, increase stock or assist with cash flow.