Posted: Wed 22nd Apr 2020
Enterprise Nation founder Emma Jones and a group of Enterprise Nation members and partners joined a call with small business minister Paul Scully and other business groups to discuss the government's coronavirus business support. Here's a summary of the discussion.
Business group representatives on the call:
Emma Jones, Enterprise Nation
Irene Graham, ScaleUp Institute
Flora Hamilton, CBI
Martin McTague, Federation of Small Businesses
Stephen Pegge, UK Finance
Enterprise Nation members and partners on the call:
Serena Humphrey, The F Word
Louize Clarke, The Curious Lounge
Joanna Hill, Ask If Inclusive Finance
Dan Martin, freelance journalist and event host
Samantha Bamert, Ask If Inclusive Finance
Zoe Whitman, But the Books
Becca Luger, Crumpet Cakes
Matt Levington, Business Doctors
Leon McCowan, Your Business Mobile
Rachel Mallows, The Mallows Company
Simon Cox, Poppy Design Studio
Samantha Oakley, SO Law
Fin Wycherley, Supersize Media
Emma Wood, The Hive
Extending business rates grants to other businesses
Emma Jones opened the feedback to the minister outlining the results of a recent survey of 500 business owners by Enterprise Nation which showed 72% are now starting to think about the future and how they plan to trade through coronavirus but 83% are still working on a financial rescue and support plan.
One key issue raised to Enterprise Nation through our coronavirus business support hub is the issue of business rates grants and whether they can be extended to other businesses.
Discussing businesses in shared workspaces, Jones said "because they're not considered retail hospitality and leisure, they haven't been afforded business rates relief".
She added: "They have had to send all of their clients home but they don't have that business rates relief so could they potentially be considered for that. There's also their clients in shared workspaces who cannot get the grants.
"We are hearing from some local authorities that they would be willing to allocate cash grants to non-business rates registered businesses if they could work with the landlords to get some affirmation that those businesses operated within the premises.
"What they need though is a slight change in direction from the government to give them the criteria to be able to do that."
Small business Paul Scully said the major priority of local authorities currently is to get the grants to eligible businesses. Latest figures show £6.11bn of the £12.33bn in England has been delivered and Scully said the aim is to hand out all the grants by the end of April.
But he stressed that the goverment "wants to be as flexible as possible to tackle some of the unintended consequences" of the schemes. Once all the grants have been delivered, Scully said "then we'll see what we've got. We'll see what we can do, if we can reallocate some of the money, where any discretion is".
Scully also said if business owners have a landlord that is getting benefit from rates relief or grants, "the spirit of the scheme would be that they share that with people".
"We've got to call out bad landlords are not playing by the spirit of things because frankly they just won't have business to come back to. If your tenants are going, then you're going to struggle in the future.
"The chancellor said a couple of weeks ago that we all need to play our part and people will look back at this and say what did you do beyond your own business? I think large businesses, landlords and people that are paying late will have to reflect on that."
Grants covering dividends for limited company directors
Another major point of contention is the fact that while limited company directors can furlough themselves and get a grant through the Coronavirus Job Retention Scheme, the grants only cover PAYE salaries and not dividends due to difficulty in separating dividends from investments.
Emma Jones put forward a suggestion by Enterprise Nation member and bookkeeper Zoe Whitman that the 'close company' box in the SA100 tax return be used as an indicator of dividends.
Scully stressed that it might seem simple but setting up a scheme that covers an estimated 750,000 companies is complicated. However, he said "please do keep feeding those solutions in".
"I will take that and see what I can do and then I've got to have that conversation with Treasury to see if there's any room to move. I wouldn't be a very good minister for small business if I wasn't talking up and looking after small business and having been there myself in that exact position".
In a previous webinar, Scully told Enterprise Nation that when he ran his own small business, he too paid himself in dividends.
Coronavirus Business Interruption Loan Scheme
Martin McTague said 15,000 small businesses are "currently stuck in a backlog waiting for small loans" through the Coronavirus Business Interruption Loan Scheme (CBILS).
One solution he said would the government providing a 100% guarantee on £25,000 overdrafts which can be made available to small businesses because the paperwork is simpler.
Scully said that business secretary and chancellor are meeting this week to discuss further changes to CBILS and the "discussion around the 100% [guarantee] and other refinements will continue to happen".
He also said he would take in board the point around overdrafts for small businesses.
Stephen Pegge from UK Finance, which represents the banks and finance industry, said accredited lenders "are working to streamline CBILS".
He also said alongside CBILS there is a lot of ordinary lending with concessionary terms and no fees being delivered. "Many lenders are talking about demands of 10 times beyond the normal level and have committed to provide bridging for furlough payments," Pegge added.
UK Finance is also working with the British Business Bank to find a way to better automate eligibility checking but he admitted that "there are some elements which are quite prescriptive and rather clunky by necessity at the very smallest end".
Pegge said he is talking to various people about solutions "which can reduce the jeopardy for lenders but also the time and hassle for customers as seeing just too many bits of paper is the last thing you want when you want some funding".
Several people on the call including Irene Graham backed the idea of giving employers the ability to part furlough their staff through the Coronavirus Job Retention Scheme.
This would mean employee hours could be reduced and covered by grants but it allow them to work some of the time rather than completely furloughing staff who can no longer do any work. This would be particularly beneficial to small businesses with a small workforce.
Scully was receptive to an issue he said has been raised a number of times. "I can't tell you that it's going to change but I know it's sitting there on the chancellor's desk," he added.
Business after lockdown
Much of the discussion focused on what should happen to help businesses come out of lockdown and re-open in what the minister described as "the new normal".
Many participants raised the issue of the need for personal protective equipment to be delivered to businesses that require it as lockdown is eased.
Stephen Pegge said businesses will also need other help. "Mentoring is going to be really important for businesses. As they come out of this, they may need to change their business shape. It might be more digital, they might need to develop new markets abroad; access to mentoring could be really crucial."
Listening into the call, Rachel Mallows said: "Mentoring is vital. All our business support organisations could also do that. There are strong statistics that show start-ups survive longer with Mentors and this could be a helpful scheme for post lockdown - helping our mindset move from survival to success."
Mallows is one of several Enterprise Nation local leaders who run regular supportive meet-ups for businesses to discuss challenges with fellow entrepreneurs in their local area.
The latest coronavirus support information
We are keeping you updated on the latest information on how to access the government's coronavirus business support here. You can also find advice and ask a question on Enterprise Nation's coronavirus business advice hub. Follow Enterprise Nation on Twitter too for updates.