What support is available for Start-ups?
According to the guidelines laid down by the Treasury, many Start-up businesses will not be considered “viable” as they are at an early stage in the investment cycle (i.e. delivering negative returns but with strong growth prospects). This means they are unlikely to qualify for CBILS although for primarily UK based Start-ups it is still worth making enquiries as policies are rapidly evolving.
For early-stage businesses in their first two years of trading, the British Business Bank’s Start-Up Loans programme (loans £500 to £25,000 at 6% p.a. interest) may be more suitable. Visit www.startuploans.co.uk for more information.
For start-up businesses that are unable to access CBILS, the Government launched The Future Fund in May 2020 via the British Business Bank, which provides convertible loans to UK-based innovative companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. This scheme is available until 30 September 2020 initially.
Your business is eligible if:
- it is UK-incorporated – if your business is part of a corporate group, only the parent company is eligible
- it has raised at least £250,000 in equity investment from third-party investors in the last five years
- none of its shares are traded on a regulated market, multilateral trading facility or other listing venue
- it was incorporated on or before 31 December 2019, and
- at least one of the following is true: (i) half or more employees are UK-based; and/or (ii) half or more revenues are from UK sales.
Further information is available on the Government website, www.gov.uk/guidance/future-fund
The Government is also offering additional support for small and medium size firms that are primarily focused on research and development. This targeted support is available through a continuity grant and loan scheme. The grant scheme is only available until 29 May 2020 while the loan scheme is open for applications until all the money is allocated or 31 December 2020 (whichever is earlier). This scheme is administered by Innovate UK, the national innovation agency, and this support will mostly only be available to existing Innovate UK customers.
Further information is available on the on the Government website, www.gov.uk/government/publications/access-coronovirus-business-innovation-support-package
Related FAQs
Business operators such as travel operators, hotels and restaurants remain vulnerable to claims of failure to protect against contracting the virus. There is a high chance of claims from employees, clients and members of the public. These are likely to be covered under public liability and employer’s liability insurance.
Although an employer is obliged to conduct consultation “with a view to reaching an agreement”, it is not required to actually agree to any counter proposals made by the employee representatives. Merely to consider them in good faith.
The Coronavirus Business Interruption Loan Scheme (“CBILS“) is open for applications to provide small businesses with a loan of up to £5m to assist with the Covid-19 outbreak. The Scheme is aimed at businesses who are experiencing lost or deferred revenues, and who otherwise would be denied support from lenders, to be supported by a Government backed guarantee. The Scheme will initially run for six months with the possibility to be extended where required, so businesses should only approach a lender under the Scheme as and when they require assistance.
If you consider the factors used to determine status you can include the following terms that are more in line with a self-employed relationship:
- The right to provide a substitute of the contractor’s choice in the event the individual is not able to perform the services;
- The ability to work for other businesses as long as doing so will not affect the services to be provided by the contractor;
- The contractor should have sufficient control over how, when and where (if possible) they provide the services;
- A degree of financial risk can be included for unsatisfactory work or failing to complete a project or task
We have terms that cover all of these points that can be tailored to your needs. The consultancy agreement is included in our IR35 toolkit.
The Government has produced workplace guidance for employers, setting out 2 key messages for employers:
- Continue to make workplaces as safe as possible; and
- Encourage workers to heed any notifications to self-isolate and to support them while they are require to isolate
Government guidance can be accessed here: How it works (an overview) and Workplace guidance for employers.