New recovery loans scheme
The chancellor revealed a shake-up of the support schemes in place for businesses, with the existing programmes ‒ like the bounce back loan ‒ replaced with a new recovery scheme.
Businesses of any size can apply for loans which run from £25,000 up to £10m. The government will provide a guarantee worth up to 80 per cent to lenders offering the loans.
Businesses reopening from April can enjoy grants worth around £5bn to help them get up and running.
The grants, which will be worth up to £18,000 per firm, will be available to high street shops and hospitality businesses.
However, the grant was quickly criticised by some. Russell Nathan, head of hospitality at accountancy firm HW Fisher, argued it did not go far enough as it only accounts for approximately £1,600 per employee in the hospitality sector.
He added: “Confidence is at rock bottom and this sector has been pushed to the back of the queue again when it comes to reopening. Businesses cannot see beyond the next quarter and they are struggling to pay rents now, with still another five months to go before revenue can start to bounce back.”
Business rates holiday
Last year the government introduced a business rates holiday for those operating in the hospitality and leisure sectors, meaning that they would not have to pay anything at all on this tax in the 2020-21 tax year.
At the Budget Sunak confirmed that this discount was being extended until the end of June. For the remaining nine months of the tax year, business rates will be discounted by up to two-thirds.
This will be capped at up to £2m for businesses who have remained closed, with a lower cap applying to those businesses in the hospitality and leisure sectors which have managed to stay open during the pandemic.
In a bid to encourage more businesses to recruit apprentices, Sunak has doubled the cash support provided. Businesses who bring in an apprentice between 1 April and 30 September this year will qualify for grants of £3,000 for each apprentice.
In total £126m is being spent on the scheme.
Help to Grow
The chancellor confirmed that £520m will go towards a new Help to Grow scheme, aimed at supporting small businesses to boost their productivity.
There will be two distinct versions, Help to Grow: Digital and Help to Grow: Management.
The digital version will provide small businesses with free online technology advice, and 50 per cent discounts on approved software which can boost their productivity.
Meanwhile, the management version will provide leaders of small and medium-sized businesses with subsidised management training, which will cover areas like marketing and financial management.
The scheme has been welcomed by the Federation of Small Businesses, which argued that projects like this can really make a difference for small firms who want to adapt the way they operate and expand their horizons, though it cautioned that its success will rely on improved investment in the nation’s broadband infrastructure.
A spokesperson said: “Crucially with all digital schemes, it is a reminder that for many, access to fast high speed broadband remains a premium depending where you go in the country. We cannot allow poor infrastructure through a lack of broadband or 5G to prevent small firms from getting a foothold onto important schemes like this.”
Alongside these new support schemes, the chancellor also confirmed that the existing furlough scheme is to be extended until September.