Jamie Younger, partner at Saffery Champness

The second round of support under the Self-Employed Income Support Scheme (SEISS) was launched this week, the Coronavirus Business Interruption Loan Scheme (CBILS) will close to new applications in September, and the Bounce Back Loan Scheme (BBLS) will close to new applications in November.

With the scheme having reopened on Monday 17 August, applications for the second round of SEISS funding can now be submitted. The scheme is open to the self-employed (including partners in a partnership) whose business has been adversely impacted by COVID-19 since 14 July.

A one-off government grant of 70% of average monthly trading profits, for three months, will be paid to those who are eligible for the scheme. The total payment will be capped at £6,570 and applications must be made by 19 October.

Jamie Younger, partner, Saffery Champness, and head of the firm’s landed estates and rural business group, said: “The second round of the scheme, announced at the end of May, will be a lifeline for many self-employed individuals. The eligibility criteria are the same as for the first round, but the payment is reduced, and those eligible should be contacted by HMRC to notify them of the availability of the funding. Any claims suspected of having been claimed under false pretences will be investigated by HMRC.”

The CBILS scheme provides loan funding of between £50,000 and £5,000,000 for UK businesses with an annual turnover of up to £45m. The first 12 months’ interest and fees are covered by the government and a 12-month repayment holiday is available. The loan term is up to 6 years. It is expected that the scheme will close to new applications at the end of September.

Similarly, the BBLS provides loan funding of between £2,000 and £50,000, up to a maximum of 25% of annual turnover. Again, the first 12 months’ interest and fees are covered by the government, a 12-month repayment holiday is available and the loan term is up to 6 years. This scheme is expected to close to new applications on 4 November.

Mr Younger continued: “With the full impact of COVID-19 yet to be felt by many farming and rural businesses, these loan application deadlines may come too soon.

“Unlike funding under the Coronavirus Job Retention Scheme (CJRS) or SEISS, the loan funding will need to be repaid, and therefore many will have attempted to negotiate this phase by using their own resources without resorting to emergency debt finance, however appealing it may have seemed. However, as the crisis continues and the impact takes hold, it’s likely that many will realise that they will need to access this additional funding to stay afloat after all.

“Other factors affecting farming businesses, including the weather, pricing of inputs, such as fertilizer and feed, and market and commodity price fluctuations may pose additional risk to these businesses during the coming months. Similarly, those that have diversified into other areas, such as events, holiday accommodation, attractions and tourism, for example, may not have felt the full impact of the virus yet. A seriously shortened season will pose a severe challenge in terms of turnover and profitability.”

He concluded: “Budgeting and cash flow forecasting has never been more important and will help to determine whether there is a need to access funding through these loan schemes, which could be crucial for many businesses as the winter bites. There will certainly be rural businesses needing to take advantage of every possible measure of support available.

“Whilst it remains possible that both these loan schemes could be extended, in the absence of any announcements to that effect, anyone wishing to benefit from this funding should ensure that they take advantage within the previously advertised life of the schemes, and that applications are made in good time.”