Further information on the financial package to support businesses through period of disruption caused by COVID-19
Further to the update on Friday 20 March regarding the financial package to support businesses through the period of disruption caused by COVID-19, the following advice has been issued in relation to how to apply for Covid Corporate Financing Facility. Additionally information relating to job retention and employee relief (together with a number of relevant links) can be found provided below.
Covid Corporate Financing Facility (CCFF)
How to access it?
It will go live on Monday 23 March and there will be an application to fill out, which will be available on the Application page (it’s not there yet) here: https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/information-for-applicants
Who is eligible?
The Bank of England (“BofE”) has clarified that UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK, will normally be regarded as meeting the scheme requirements (“making a significant contribution to the UK Economy”).
Eligibility decisions will be made on a case by case basis by the BoE taking into account a number of different factors (e.g. whether the relevant company has significant employment in the UK or its headquarters in the UK and other factors such as its revenues in the UK, whether it serves a large number of customers in the UK or has a number of operating sites in the UK).
The current guidance is looking at companies that have investment grade ratings as at 1 March 2020 – so if a downgrade has been made after this date they would still be eligible. It is worth noting that not all companies have an accessible rating but the BofE will work with companies to replicate a rating if this is the case.
Announced 20 March: the Coronavirus Job Retention Scheme
The Chancellor announced on Friday 20 March that the Government is setting up its new Coronavirus Job Retention Scheme. Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.
Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off. Government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month – that’s above the median income. And, of course, employers can top up salaries further if they choose to.
The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and will be open initially for at least three months. The Scheme will be extended for longer if necessary. Further guidance will be provided as soon as possible.
Links on what is available, including the Business Interruption Loan Scheme can be found below.
- Linklaters’ overview of the CCFF scheme: https://www.linklaters.com/en/insights/publications/2020/march/hm-treasury-and-bank-of-england-announce-covid-corporate-financing-facility
- BoE overview of CCFF (Covid Corporate Finance Facility) – a scheme which will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy. https://www.bankofengland.co.uk/markets/market-notices/2020/ccff-market-notice-march-2020
- BoE Applications page – CCFF applications can be made from March 23 when the application form is published here:https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/information-for-applicants
- Range of government support for businesses and individuals:https://www.bdo.co.uk/en-gb/insights/tax/corporate-tax/covid-19-government-support-for-individuals-and-businesses
- Within that, small and medium-sized businesses (turnover no more than £41m) will be supported through Coronavirus Business Interruption Loan Scheme (CBILS) delivered by the British Business Bank, providing loans up to £5m 80%-guaranteed by the Government. Scheme will become available in the week commencing March 23.https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
HMT published the following guidance, which sets out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
If members have applied for the CCFF or Coronavirus Job Retention Scheme please can they share their feedback with the Chamber so it can be fed into the response to Government.