Will it be 'too little too late' for small businesses?
The coronavirus lockdown has brought life to a standstill. For many businesses and industries, it is a worrying time, as staff are furloughed and/or the business has had to close temporarily. Some of these might eventually succumb to the crisis and close permanently.
On March 17 Chancellor Rishi Sunak announced £330 billion support to small business during the current situation. The Government’s new package includes a 'coronavirus job retention scheme', to protect workers and their employers by helping to pay wages in an historic move by the government.
The package promised that companies and organisations will be able to apply for a grant from HMRC that will help cover 80pc of wages of people who are not working due to coronavirus shutdowns, but who haven’t been laid off. Mr Sunak also announced VAT relief for business until June to support companies struggling with a cash flow.
However, Peterborough Matters spoke to a few business and restaurant owners in the city who have criticised the government’s support plan.
Last month we spoke to Damian Wawrzyniak who runs House of Feasts in Eye - he warned that businesses will 'drop like flies' if they did not get financial help soon.
And two other small businesses have agreed, saying there is no clarity on the process to claim this support or any information on the timeline to access the help. By the time they get any support from the government, they fear it might be ‘too little, too late’.
Below are their stories:
"I run a small business in the printing industry and rely on other businesses to give us orders. Due to the lockdown, our business has shut and therefore not operational. My staff have been furloughed and will get the 80pc salary as promised by the government. However, I am a business owner currently with no furlough option to fall back on and have got no other income option.
"So, I have had to take up full time employment an essential worker in the food industry, just to be able to provide for my family. When I’m not working there I’m working on the admin side of my business to help keep it on track and to help my staff claim the support they need to see them through.
"Many small business owners will be in a same position as me. The government appears to have offered billions of pounds of business loans in support to people like us during the current crisis. However, there is so much small print with those promises, with no certainty of any financial approval, I doubt many will apply for these with real certainty of fulfilling the conditions.
"These loans need to be applied for through the banks. The government has given a limited number of banks and similar institutions lending powers to help businesses but they all have different conditions. These conditions are based on us meeting sales figures that are unpredictable at this point in time. Even if small business were to take on the loan- then they will have to start paying it straight away.
"There needs to be a ‘settling-in’ period of around three months before any repayment is made, this will give businesses time to resettle into production and plan their outgoings with accuracy. Not many businesses will be able to survive without this being fully understood. If left alone this would mean people losing jobs in the months to come.
"Businesses like mine work on projects such as events and exhibitions, which obviously have all been cancelled. We can pretty much write off any happening at all this year, exhibitions are a major part of our income that will not be back until next spring time at the earliest.
"We were doing quite well as a business before this started. In-fact thinking of expanding. This situation will hold us back – no question!
"I received a business rate bill in the post from Peterborough City Council, with no mention of any of the business rate relief we should expect, there was no information given on how to claim or where to get more details. The council has no online updates either and are not answering email requests, so I am completely in the dark.
"Banks are seemingly being helpful but they seem to be working to their own agendas. The business rate relief for a company my size is £10,000 which may look like a lot to an outsider but trust me it’s not. It will be used to keep the business overheads covered - an essential amount.
"I just think it’s not going to be so straightforward to claim this support that has been offered as it sounds. With this being so difficult to secure then that’s when businesses will start to take decisions - is it worth taking that risk? Why continue with so much uncertainty? It’s a tricky situation to be in.
"The reality is, it’s not so easy to get hold of that money pot promised by the government. The situation is not going to get better anytime soon and will have repercussions for years to come!
"As a business owner I will remain committed to the company, my staff and the city. The question is how many others in my position will feel the same?
“I am a self-employed dance teacher. I take dance lessons at a community centre in Peterborough. However, that’s now shut due to the lockdown. My clients are also in lockdown.
"I do not have any other source of income. I am managing okay for bills etc this month; however, I have no idea where I am going to get that money for next month. It’s a worry.
"I have a very small business, so I don’t even qualify for the support promised by the government.
"It’s a shame. I really enjoy my work and can’t wait to get back to it soon. I don’t know when tis virus will pass.
"I am getting anxious about the whole situation and can't sleep or eat very well because of this."
If you are a business owner and would like to share your experience, please get in touch with us on email@example.com