In response to Coronavirus, the UK Government has provided two main methods of support for small businesses, and businesses in the retail, hospitality and leisure sectors:
Small Business Grant
Retail, Leisure and Hospitality Grant
On 1 May, the Government announced a 5% top-up to these, aimed at small businesses who were not eligible for either grant. This has become known as the Local Authority Discretionary Grants Fund (LADGF). Guidance for local authorities on the LADGF has now been issued.
Size of grants
Local authorities may provide grants to the value of:
Any amount under £10,000
The value of the payment to be made to a business is at the discretion of the local authority.
Businesses that the grant aims to support
These grants are primarily and predominantly aimed at:
Small and 'micro' businesses
Businesses with relatively high ongoing fixed property-related costs
Businesses which can demonstrate that they have suffered a significant fall in income due to the Coronavirus
Businesses which occupy property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £51,000
The Department for Business, Energy & Industrial Strategy has asked local authorities to prioritise the following types of businesses for grants, though this list is not intended to be exhaustive:
Small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment
Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment
Bed & breakfasts which pay council tax instead of business rates
Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief
This grant funding is for businesses that are not eligible for other Coronavirus related cash grants, such as:
Retail, Hospitality and Leisure Grant
However, if your businesses has applied for the Coronavirus Job Retention Scheme then it is also eligible to apply for LADGF.
Only businesses that were trading on 11 March 2020 are eligible for this scheme.
Companies that are in administration, are insolvent or where a striking-off notice has been made are not eligible for funding under this scheme.
It is recognised that local authorities will need to run some form of application process as the potential beneficiaries are highly unlikely to be known directly by the local authorities. This will allow each local authority to:
Undertake proportionate prepayment checks to confirm eligibility relative to their local scheme
Determine how to use its discretion in relation to the appropriate level of grant
Establishing an application process is likely to to take local authorities some time, but we recommend that eligible businesses contact their local authorities to register their interest.