With new government announcements regarding business support coming out almost daily, the Oxfordshire Local Enterprise Partnership (OxLEP) assembled an expert panel to demystify the wide-ranging support packages available to businesses and to find out their predictions for the region’s economic future.
Questions from the region’s business community in advance of the digital Q&A session showed the scale of the challenge they are facing. The panel, comprising a banker, lawyer, accountant and local councillor, was chaired by radio presenter Howard Bentham.
Ashley Keen, Director of Metro Bank in Oxford, outlined the government-supported Coronavirus Business Interruption Loan Scheme (CBILS) which, despite some high-profile issues, has unlocked funding for more than 22,000 UK businesses so far. He explained how after receiving a huge number of enquiries and wrestling with rapidly-changing government guidance, Metro Bank is now helping applicants from a diverse range of sectors to access loans to support them through this period. Small businesses will also gain access to a new micro-loan scheme from 4 May with a simplified application procedure offering 12-month interest-free loans of up to 25% of turnover, capped at £50,000.
Isabel Bishop, an employment lawyer at law firm Knights PLC, urged businesses only to apply for these loans if they are confident of emerging from the crisis with the ability to continue trading. Wendy Hart, a partner at accountants Grant Thornton, agreed, emphasising that CBILS loans are specifically for businesses impacted by the pandemic and will need to be repaid or otherwise refinanced – they are not free money.
The expansion of business rate relief has been widely welcomed by local businesses, reported Cllr Barry Wood, Leader of Cherwell District Council, adding that the local authority has now processed additional grant applications equating to 65% of funds allocated by the government for this purpose. He said he had been impressed with how the region’s businesses had adapted to the lockdown as well as their clear appetite for recovery.
Wendy Hart reported that many SMEs have taken advantage of the Coronavirus Job Retention Scheme, a significant financial lifeline which enables companies to furlough employees on 80% of salary, capped at £2,500 per employee. This scheme, now extended until 30 June, provoked the most questions for Isabel Bishop, including whether employees should take holiday during furlough so that businesses are not faced with a mass of holiday requests later, and how to navigate the complexities of sick pay for employees on furlough. The panel also discussed difficulties accessing support for the self-employed and how some businesses have completely fallen through the cracks.
On deferred tax and VAT, Wendy Hart advised that although payments to HMRC will have to be paid in the end, it is a good way of improving cashflow and providing financial headroom for businesses.
The panel felt that many businesses are already beginning to look ahead. Those least impacted are generally adept with technology or have been quick to adapt. Some companies are now contemplating new business models that will include virtual ways of working.
Cllr Barry Wood summed up this optimistic view of the future the best, praising the innovative approaches of local businesses and saying: “There was a strong economy here before and there’s no reason why it can’t bounce back.”