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Budget 2021: SMEs and retail

New grant scheme to aid business recovery

Sale shop retail

Aid: Help for business.

The UK Government is to introduce a new Restart Grant next month as it bids to help businesses back onto their feet.

Chancellor Rishi Sunak said the additional funding would “help businesses reopen and get going again”.

He said non-essential retail businesses, which will open first, will receive grants of up to £6,000 per premises.

Hospitality and leisure businesses including personal care and gyms, which will open later or be more impacted by restrictions when they do, will be entitled to grants of up to £18,000.

Announcing the new grant scheme during his Spring Budget, Mr Sunak said: “That’s £5 billion of new grants on top of the £20bn we’ve already provided, taking our direct total direct cash support to business to £25bn.”

A new loan scheme is also to be introduced to aid SMEs, said Mr Sunak.

“Even with the new restart grants, some businesses will also need loans to see them through, said the Chancellor. “As the Bounce Back Loan and CBILS programmes come to an end, we are introducing a new recovery loan scheme to take their place.”

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Under the new scheme, businesses of any size can apply from £25,000 to £10m through to the end of this year, with the government providing a guarantee to lenders of 80%.

Mr Sunak added: “We have announced over £280bn of support, but the damage done by coronavirus has been acute. We will continue doing whatever it takes to support British people and businesses.”

The increased limit of £100 for legal contactless payments, is good news for consumers, according to UK Finance chief executive David Postings.

He said: “This is a great move for customers and will allow them to use contactless to pay for higher value transactions like their weekly shop or filling up their car with fuel.

“This could not have been achieved whilst still in the EU so is a true Brexit dividend. We will work closely with the payments sector and retailers ahead of increasing the limit later this year.”

Donald Boyd, partner and SME specialist at Azets, the UK’s largest regional accountancy and business advisors to SMEs and Top 10 accountancy firm, said: “Many SMEs will continue to be able to obtain lifeline loan cash to help them with recovery. 

“The new recovery loan scheme being launched will help those businesses who have either not borrowed enough cash under the existing CBIL arrangements or where they depleted their cash reserves over the last 12 months.

“The recovery loan scheme is available for any legitimate purpose and coupled with the new 130% investment allowance for plant and machinery expenditure will help businesses invest for the future. 

“One thing the last 12 months has taught us is that the pace of change in technology is relentless and SMEs need to pivot quickly to change business models.”

Budget 2021 reports here

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