How financial support is helping firms adapt

Thousands of companies have been taking advantage of an unprecedented package of UK Government support to protect jobs and support businesses during the coronavirus outbreak. The financial support is helping firms across the nation to adapt, innovate and protect jobs. Here are two examples of how companies have been helped, and what support is available.

NORTHERN IRELAND IN NUMBERS

212,000 jobs furloughed through the Coronavirus Jobs Retention Scheme up to May 31

69,000 claims amounting to £198 million through the Self- Employment Income Support Scheme up to May 31

Across the whole UK 70 per cent of those eligible for SEISS made a claim. The average value of a claim is £2,900

Source: Her Majesty’s Treasury

CASE STUDY 1

SHNUGGLE

Planning, forward thinking and invaluable help from the UK Government has enabled a Northern Ireland firm to diversify and remain solvent. When Covid-19 struck, Newtownards baby product manufacturer Shnuggle’s owners Sinead and Adam Murphy were prepared thanks to advice from their export colleagues in China. Sinead said: “We reduced our out-goings, put on pause our marketing spend in the business. We just tried to protect the cash that we had.

“The first impact was our customers that we sell to in Asia. They all went into lockdown so our orders and sales to them stopped. But also a lot of our production happens out in Asia so our factories went into lockdown.

“Luckily we had bought a lot of stock beforehand. We were so relieved that we had, at least we could carry on trading with our UK and European customers.” With around half of the company’s sales in the UK and Ireland and half in the export business, Shnuggle had to rely on their local retail-base.

Sinead continued: “Baby items were classed as essential goods which was a huge relief to us. This meant as long as we could socially distance within the warehouse we could continue trading and selling online. All of our business is supplying other retailers like John Lewis, Mamas and Papas, Amazon. But our online sales actually grew because everyone was at home and maybe an element of panic buying.”

Shnuggle took advantage of the furlough and Coronavirus Business Interruption Loan Scheme (CBILS) schemes.

Sinead said: “We furloughed five out of our 16 team, and were able to access the Business Interruption loan through Ulster Bank. “We were relieved to get the money in quickly, so we weren’t worrying about paying wages or our biggest overhead was our suppliers in China who were calling in all of their debts.

“That was our biggest headache and stress, we owed significant amounts of money to them and we didn’t have the cash as we needed time to sell our products.”

Shnuggle also received a £10,000 Small Business Grant. Adam said: “Furloughing was brilliant, and the CBILS was the one that was the best for us because it meant that we could keep all our suppliers happy. “So even though we had a temporary dip in our sales, and obviously the inventory was sitting there ready to sell, it just kept us solvent and the cash flow moving. It’s really going to help us trade out of it, and if all goes well, we should be able to get back into a reasonably strong cash position within the next six to 12 months. The loans coming in helped us to sleep at night.”

The Government schemes also gave Sinead and Adam the freedom to diversify into the PPE market and the development of HeroShield Ltd, enabling local firms to unite to develop a protective face covering for key workers.

This non-profit company designs, produces and distributes reusable visors.

‘It’s surprisingly easy and money arrives quickly’

CASE STUDY 2

Q-MASS 

An unprecedented package of UK Government financial support has helped firms like Q-Mass in East Kilbride weather the coronavirus crisis.

Director Ronnie Robertson said lockdown hit his company’s order book, but the Coronavirus Job Retention Scheme has been vital to help them hang on to their valued staff. Ronnie said: “Before this, we had quite a good order book, with three to four months of work planned, so we were pretty worried where it was going to take us.”

At first, he was worried how he would keep Q-Mass’ 47 staff on the payroll, but then the Coronavirus Job Retention Scheme was announced.

It offers UK Government support to pay 80 per cent of staff’s wages up to £2,500 a month, and the scheme has now been extended until the end of October. Q-Mass manufactures bespoke parts for the oil, gas and defence industry so staff training is important. Ronnie said: “Our staff are very highly skilled. We’ve gathered a bunch of people here and trained them up and taken on apprentices. We do a lot of training, we’ve got good people, we train them a lot and we want to hang on to them.” He found applying for the furlough scheme quick and straightforward. He said: “It was surprisingly easy and we were surprised that the money came through relatively quickly.”

Now staff at the firm who’ve been furloughed are gradually returning to work, with strict safety measures in place.

Ronnie said: “We’ve put a day shift back on and we’ve still got a few office people working at home, with quite a few still on furlough.

“We’re just ticking over. We’re trying to cover our costs every month, trying to break even, to stay still. We’re looking at it that if we can stay still we’re doing very well.” And because of the size of the building, maintaining a two-metre distance hasn’t been a problem for returning staff. Ronnie said: “It’s been really easy. We’ve got a big workshop with wide corridors and we’ve got a lot of the doors propped open internally so no-one has to touch doors or handles. We’ve got a few toilet areas with restrictions on them and a couple of one-way corridors, but the offices are open plan, so there’s no real need for people to be near each other. The workshop’s a big, wide open space and we have to keep cleaning things like photocopiers and touch screens, but it’s been quite straightforward.”

Now Ronnie’s looking forward to a brighter future. He said: “I feel like we’re on the side of the valley and we’re looking across to the other side and it looks absolutely fantastic.”

Money for business and staff

Here are some examples of the support available for businesses and workers.

• The Coronavirus Job Retention Scheme has enabled businesses to put employees on a period of temporary leave (furlough) and apply for a UK Government grant to cover 80 per cent of those workers’ usual monthly wage costs, up to £2,500 a month.
• The Self-Employment Income Support Scheme will allow eligible self-employed individuals to claim a taxable grant of 80 per cent of their average monthly profits, up to £7,500.
• UK VAT-registered firms have been given the option to defer VAT payments until the end of June. There will be no interest or penalties on any amount deferred.
• Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.
• The UK Government’s Bounce Back Loans Scheme provides loans of up to £50,000 to small businesses, with a 100 per cent government-backed guarantee for lenders.
• The Coronavirus Business Interruption Loan Scheme is available for loans or finance of up to £5m. The UK Government will provide the lender with an 80 per cent guarantee to support the lending.
• The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of Statutory Sick Pay they pay current or former employees for sickness starting on or after March 13, 2020.
• The Future Fund will issue loans between £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak.

Details of the support available to businesses across the UK can be found at gov.uk/coronavirus/business-support