Help with business finances UK companies are the lifeblood of the economy. In the current economic climate we know that some companies are struggling to secure the finance they need, not because of any failure in their business but due to much tougher credit conditions. The following package of support measures is designed to improve access to credit and provide help with business finances. Freeing up bank lending: action behind the scenes The Government is working with UK banks and the European Investment Bank to maintain existing lending and make more available to small and medium-sized firms. The Working Capital Scheme will secure up to £20 billion of working capital credit lines for ordinary risk companies with a turnover of up to £500 million a year, so ensuring that they are safe from reduction or withdrawal. It will also free up capital which the banks must use for new business lending that would otherwise not be available. With the European Investment Bank, the Government has helped UK banks to negotiate credit lines of more than £4 billion in order to provide loans to small and medium‑sized businesses – £1 billion of which have already been made available. Enterprise Finance Guarantee Scheme If you have a business with an annual turnover of up to £25 million, you could get a loan of up to £1 million for a period of up to 10 years under the Enterprise Finance Guarantee Scheme. You can use the money to convert an existing overdraft into a loan so that you can free up the overdraft facility for other working capital demands. Barclays, Clydesdale/Yorkshire Bank, HBOS, HSBC, Lloyds TSB, RBS/Natwest and Northern Bank have signed up to this scheme, so if you apply for a loan from one of these banks you may be able to benefit from the Government’s guarantee. As with any other loan, your bank will decide whether to lend to your business, but the Government’s guarantee will mean that some businesses who might otherwise not have been able to borrow will be able to obtain a loan. The Government will be monitoring the implementation of this scheme. Regional loans If your business hasn’t been able to secure funding from the bank under the Enterprise Finance Guarantee Scheme, you may be eligible for a loan or other support from your Regional Development Agency. Our local Business Link (0845 6000 787) can advise on what additional financial help is available from the development agency in our region. Capital for Enterprise Fund Through this fund, viable small businesses with high levels of existing debt can get real help to raise long-term finance. Professional fund managers will provide equity investment which you can use to pay off existing debt, so as to free up capital for day‑to‑day cash flow and for investment for the future. The Government is providing £50 million of this £75 million fund, with the remaining £25 million coming from RBS, HSBC, Lloyds TSB and Barclays Call the Capital for Enterprise Fund Registration Helpline, 0845 459 9780 Need more time to pay your tax bill? If you are worried about paying your tax, National Insurance, VAT, PAYE or other payments to HM Revenue & Customs (HMRC) then you can contact the Business Payment Support Service. HMRC staff will review payment of your tax liabilities with you and try to come to an arrangement which allows you to spread payment over a period which meets the needs of your business and helps you over temporary difficulties. You won’t be charged additional late payment surcharges or penalties on payments included in the arrangement. But interest will still be payable on those taxes where it applies. Over 30,000 businesses have been helped to spread payments in this way, amounting to more than £500 million of tax. Visit Business Link or call the Business Payment Support Service, 0845 302 1435. Managing cash flow You can find short guides on managing cash flow, developed by the Institute of Credit Management and funded by the Government, at Business Link. The Government is encouraging all businesses to agree to pay suppliers on time. You can see which businesses have signed up to this at Prompt Payment Code. Central Government is also helping by committing to pay its own bills within 10 days Debt problems To get free, confidential and independent help to deal with business debt problems so you can successfully manage your way through financial difficulties, call Business Debtline, 0800 197 6026. |