Indie retailers could ‘fall through the cracks’ of government funding
Many independent food retailers faced an uncertain start to this year after fresh government measures to tackle COVID-19 deprived them of business and failed to guarantee them financial support.
Firms reliant on passing trade, events and close interaction with customers were dealt yet another blow when prime minister Boris Johnson effectively closed most schools and offices and ordered people to stay at home from Monday 4th January until at least February half-term.
Chancellor Rishi Sunak announced that retailers required to close their doors would be able to claim up to £9,000 per outlet due to the latest lockdown but this left question marks over the support available for firms allowed to stay open.
A further £594 million in discretionary funding was made available for councils to distribute to businesses not eligible for the grants but food specialists were left wondering how and when they were likely to see any of that cash.
‘If we get five customers we are lucky’
Sangita Tryner, owner of Nottingham-based Delilah Fine Foods, said the shop would usually be “buoyant” in January as office workers came in for catered meetings and shoppers dropped by during visits to the sales.
“These next few months are going to be dire,” she said in early January. We are currently open five days a week but mainly housekeeping – if we get five customers in a day we are lucky.”
Tryner was hoping to get hold of a slice of the discretionary funding announced by Sunak but said patience and relationship building were critical.
“It is not enough but it is something,” she said. “We are working closely with the council and received a grant in the past. It doesn’t come knocking; I didn’t hear for months. Be resilient and build up your contacts.”
Daniel Williams, project manager at Cheshire’s Godfrey C Williams & Son, said the high street in Sandbach was “virtually empty” in early January.
Business was impacted in several ways by the lockdown, he added.
“We no longer cut cheese in the front of the shop during opening hours, and I no longer roast coffee with customers or even staff in the shop. I’m expecting cheese wedding cake orders and appointments to remain in a state of flatline and virtually all of the bars and restaurants we supply have closed entirely.”
Independent food retail could fall through the cracks in the government support package, he added.
“I am unsure as to whether we are eligible for the local authority grants. An extension of the business rates holiday would be of more value to us.”
Meanwhile, financial consultancy Blick Rothenberg said an extension of two loan schemes (see below) designed to support businesses during the lengthy pandemic was “just a sticking plaster”.
Partner Richard Churchill said: “Access to the money is no longer quick and many businesses face weeks of battles with their bank to access the funds.”
Sunak said in January: “Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the spring.”
Government financial support available
Retailers forced to close as a result of the third national lockdown at the start of this year can apply for a one-off payment of up to £9,000 per property depending on their rateable value. A further £594 million “discretionary funding” has been provided to devolved administrations and English councils for firms remaining open but hit by the restrictions.
The Coronavirus Job Retention Scheme has been extended until the end of April 2021, meaning employers can furlough eligible staff and claim 80% of their usual salary for hours not worked, up to £2,500 per worker per month. For periods from 1st November 2020, firms can claim for employees who were employed on 30th October 2020 and meet related PAYE submission criteria.
Business rates relief
Shops in England do not have to pay business rates for the 2020 to 2021 tax year however they currently remain liable to pay the levy in the 2021/22 period that begins on 6th April.
Business Interruption Loan
The Coronavirus Business Interruption Loan Scheme is open until the end of March. It allows companies with turnovers of up to £45 million to access government-backed sums of up to £5 million without paying interest or fees for the first year. Companies need to show that they would be viable if it not for the pandemic and that they have been affected by COVID-19.
Bounce Back Loan
This scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover up to a maximum loan of £50,000. The government guarantees 100% of the loan and there are no fees or interest to pay for the first 12 months. The scheme is open to applications until 31st March 2021.
Local Restrictions Support Grant
Businesses that did not have to close but were severely impacted due to local Tier 2 or Tier 3 restrictions are eligible to claim support through this scheme for periods before the national lockdown came into force. Enquire to your local council.