The Coronavirus pandemic has certainly caused unprecedented disruptions to so many areas of life. Of course one area heavily hit has been business. Their has been such a negative affect all of these shutdowns have caused to businesses not only nationally, but also worldwide. David Azzato shares what is happening in the UK with regards to Entrepreneurs who have been adversely affected by the COVID-19 shutdown.
The UK government is looking ahead and making some decisions on what needs to be done. Since things are starting to open up again, the Government Ministers are making plans to focus much needed attention on as many as two million entrepreneurs across the country. An important source of income for many of these entrepreneurs is dividend payments, and many of these people have not been able to gain any access to any of this because of the lockdowns.
In order to help the various businesses, David Azzato shares information that the UK Government has provided many types of support. They include things such as loans, cash grants, and tax relief. The Coronavirus Business Interruption Loan is one form of support that can be provided to businesses considered small to medium in size. Created by the government, it is designed to help these businesses gain access to COVID-19 loans.
The government is also trying to provide some support to not only those that are self-employed, but also those business that have been affected negatively due to restrictions put into place resulting from the coronavirus. Another support provided to employers and employees is the job retention scheme. This allows the employer to be able to continue providing pay to their employees. On top of that, it also provides some tax benefits. ,
These government-backed loans will receive applications through the end of January 2021. The criteria that must be met are these businesses must be based in the UK, and they have to have been negatively affected by the COVID-19 shutdown. Since some businesses may face challenges on more then one front, they are able to take advantage of the various loans that are being offered and apply for all the ones that meet their needs.
Some of the options offered include term loans where the loan is repaid with consistent payments over time. Overdrafts improve cash flow on a short-term basis by providing a line of credit. Asset finance takes the purchases of a business and spreads out the cost of them. Invoice finance is also able to help with the cash flow on a short term basis. These are all great, however not much has been offered to those that may rely on passive income or dividends as a source of finances. The Treasury has not chosen to provide much support in this area. The reason behind this is they argue that for those that receive dividends, it is not easy to distinguish whether the dividends were paid at the time of employment, or if they are just another form of passive income.
The Treasury has indicated their commitment to start working on a grant-based program that may provide help to those types of entrepreneurs. Several different groups involved in finance are supporting the Director’s Income Support Scheme. This is specifically designed for those entrepreneurs that receive the majority of their income through dividends. This will be done by providing grants up to a certain percentage of average earnings, and up to a certain amount. In order to qualify for this, a business must be negatively impacted by the coronavirus, and they must show that they are either still actively trading, or else would be intending on trading if not for some temporary inability to do so because of COVID-19. As an entrepreneur and an investor, David Azzato sees the need for the government to get involved in helping other entrepreneurs get back on their feet.
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