19 Mar 2021
The date 12 April is etched in the minds of many a business owner and consumer. It’s when non-essential shops, hairdressers, pubs and gyms can finally reopen – albeit with restrictions. So, what can businesses do to make sure they get a headstart?
According to a recent survey by accountancy firm Haysmacintyre, leisure and hospitality businesses are ‘optimistic’ about a trading bounceback following the 12 April. In fact, 69% reckon that normal trading levels will resume by the end this year or the start of next.
There is some variation within the sector, however. While 83% of hotel businesses say they’re confident about the future, 59% of pubs said they’re uncertain or lacking in confidence when it comes to their future prospects.
Needless to say, businesses across all affected sectors have pulled out all the stops to get to this point. Nearly 50% of pubs and bars surveyed by Haysmacintyre have introduced new ordering and payment apps in preparation for socially distanced operations, for instance.
If you’re gearing up for reopening on 12 April, you might be feeling a little nervous as well as excited, and that’s understandable. We’ve pulled together the following tips to help you feel more confident. Remember – the Funding Options team is always here to help.
Most of us know which businesses can reopen at this point, but the first step to feeling confident is to understand exactly how we can reopen. April 12 is referred to as Phase 2 of the roadmap. Phase 1 takes place on 29 March and is when outdoor sports facilities can reopen and outdoor parents and children’s groups (of up to 15) can resume.
If all goes to plan, gyms, spas and swimming pools will be able to reopen on 12 April. Customers must adhere to social distancing rules, as restrictions on indoor mixing will still be in place. Only individuals or members of the same household can visit together.
Household mixing indoors will be permitted on 17 May at the earliest.
Because households can’t mix indoors, group exercise classes won’t be allowed to resume on the 12th. (This could change on 17 May when the rule of 6 comes into play, which is also when saunas and steam rooms can reopen.)
Non-essential retail shops such as clothes shops, homeware stores and car showrooms can welcome customers again on 12 April. Again, customers must adhere to social distancing rules and stores are only permitted to serve individual customers or people from the same household.
It’s likely that face masks in shops and other indoor establishments will be mandatory until 17 June. With this in mind, it’s a good idea to place a sign on the front of your shop stating the number of people permitted to enter at any one time and that masks must be worn.
Pubs, restaurants and some other hospitality venues are set to reopen on 12 April with restrictions. Customers can only be served outside in groups of 6 max, and table service will be mandatory. Unlike last time, there won’t be a curfew and customers won’t be required to order a “substantial meal” when drinking alcohol.
Come 17 May, pubs, bars and restaurants should be able to serve people indoors again, however the rule of 6 and social distancing measures will still apply.
Since the roadmap was announced in March, lots of hairdressers have been overwhelmed with bookings from people in dire need of a haircut! Fortunately, beauty establishments should also be able to reopen on 12 April. As with pubs, shops and gyms, you can only admit customers attending alone or with the members of their household.
The travel sector has been one of the hardest hit by the pandemic, however there’s hope on the horizon. On 12 April, self-contained accommodation in the UK will reopen for individuals or members of the same household.
If all goes to plan, we should be able to travel abroad again for holidays from 17 May. This is when the UK Government plans to hold a review of the safety of the reopening of borders.
Below are some of the financial support measures that were outlined by the Chancellor in the budget. For a more comprehensive look at what’s available for your business as the roadmap unfolds, check out our article on what the 2021 budget means for SMEs.
Non-essential retail businesses and hospitality/leisure companies can take advantage of the Restart Grant in April, which is designed to help companies “reopen and get going again”. Non-essential retailers can apply for up to £6,000 per shop and hospitality/leisure businesses are eligible for up to £18,000 in financial support.
Non-essential retail businesses and hospitality/leisure companies can take advantage of the Restart Grant in April.
April is also the month that the super deduction for new equipment begins. You may have been putting off purchasing new equipment, vehicles or machinery during Covid, however the Government is now offering an incentive to invest.
Between 1 April 2021 and 31 March 2023 you can claim 130 percent of what you spend on qualifying plant and machinery assets against taxable profits. The scheme is in the process of being finalised, but you should be able to use asset finance to fund your new purchases.
So, if you’ve been planning to invest new vehicles, refrigeration units or IT equipment for your business for reopening, there’s arguably never been a better time.
Thankfully, the 100% business rates holiday has been extended until the end of June, which will help take some of the pressure off businesses reopening on 12 April.
Hospitality and tourism businesses reopening on 12 April will continue to benefit from the 5% VAT reduction. The VAT reduction applies to the following:
Food and non-alcoholic drinks eaten on the premises
Holiday sleeping accommodation, including hotels and campsite pitches
Admission to theatres, zoos, amusement parks, cinemas, museums, etc.
Even if you’re reopening to the public on 12 April you might not yet have enough capacity or demand to bring back all your employees. If you do need to keep some staff on furlough, bear in mind that you’ll be asked to contribute 10% of wages in July and 20% in August and September, which is when the furlough scheme is scheduled to end.
On 6 April, the week before you’re due to reopen, is when you can start applying for business finance through the Recovery Loan Scheme. This new scheme is set to replace the CBILS, CLBILS and BBLS which will end on 31 March 2021.
You can apply for a Recovery Loan from 6 April - the week before you reopen.
If eligible, you’ll be able to apply for a term loan, asset finance, overdraft or invoice finance facility worth up to £10 million. There’s no turnover restriction this time, so businesses of all shapes and sizes can apply for a loan through the scheme.
We’ll provide information on how to apply to the Recovery Loan Scheme as soon as all the details are available. Until then, there’s still time to get a CBILS loan to give your business a cash injection as it prepares to welcome customers back.
Government-backed loan schemes aside, there are lots of alternative business finance options out there that can give your business the necessary cash flow headroom it needs as things begin to return to “normal” on 12 April. Working capital finance can also be used to fund growth projects. For example, you can use it to:
Refurbish your premises
Improve cash flow
Invest in more stock to meet growing demand
You might decide to take out a term loan, where you borrow a lump sum from a lender and pay it back, plus interest, over and agreed timeframe. There are lots of alternative and more flexible working capital finance options out there too, many of which don’t require security.
These include, but aren’t limited to:
Non-essential retail shops, hospitality and leisure business take note: if you accept customer card payments (let’s face it, most do), you could be eligible for a merchant cash advance.
It works by you borrowing a sum from the lender and instead of paying it back in equal instalments every month, you pay it back – plus interest – through a percentage of your customer card payments. It means you end up paying more when business is going well, and less when demand for your products/services is lower.
Business credit cards can come in handy when you need ad hoc access to cash. They can be a super quick and easy way to alleviate short-term cash flow issues. Additional perks include interest-free periods and rewards such as air miles or cashback.
As with personal credit cards, you’ll have a limit on how much you can spend and this is usually based on how “creditworthy” you are in the eyes of the lender.
If you’re looking to take out an unsecured business loan and aren’t eligible for the CBILS (or Recovery Loan Scheme in April), you might decide to look for an unsecured term loan of up to £250,000. These loans are suited to businesses who can’t or don’t want to offer an asset as security and there are lots of options to choose from.
As the business community heads towards Phase 2 of the lockdown roadmap, Funding Options is here to help. You can use us at any point in your recovery journey to find the finance you need to continue serving your customers and growing your business.
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