The Government expects the grants to help smaller businesses overcome the impact of the coronavirus pandemic in a timely manner.
Thousands of small and medium-sized companies in England will be able to claim grants from £1,000 to £5,000 to purchase new equipment and upgrade technology and help them access professional, legal and financial advice. The scheme will be fully funded by the Government so there will be no obligation for businesses to make a contribution or repay the money.
Simon Clarke, Minister for Regional Growth and Local Government, said that the administration has always maintained its commitment to support businesses and communities in restructuring following the outbreak of the coronavirus pandemic.
This new funding, he added, does precisely that and will provide firms with new grants to cover the cost of equipment, technology and the expertise they require to adapt, recover and rebuild. Mr Clarke remarked that SMEs are the lifeblood of communities in that they provide employment and contribute substantially to local economies.
He stressed that the Government is determined to give them the support they need to continue to thrive.
The programme follows in the wake of an unprecedented package of government support to help firms recover, including the £2bn Kickstart Scheme which will create hundreds of thousands of new, fully subsidised jobs for young people across the country.
This is in addition to the £1.6bn invested in scaling up employment support schemes, training and apprenticeships to help people find a job. The Government has further pledged a £10m package to shore up the companies operating in the tourism industry and support the visitor economy.
What the small business grant can be spent on
The grants can be used in one of two ways. Either by purchasing equipment “to adapt or install new technology in order to continue to deliver business activity or diversify”, according to the document published by the Ministry of Housing, Communities and Local Government. Or by “helping businesses access specialist professional advice”.
Obtaining specialist advice and assistance from financial service providers can be a life-saver for many firms trying to cope with the effects of the pandemic. Specifically, the grants can be used to access accounting and financial services, legal advice, IT and digital information, and human resource counselling.
The need for financial advice in a crisis
At a time of great uncertainty, having access to sound financial advice is crucial. Hiring an accountant is one of the smartest moves to make for a new business or one with several years of experience in a particular industry. An accountant can assist with a broad range of financial matters, from dealing with tax to managing invoices and customer payments.
Small business late payments can be a source of real difficulty, putting around 25pc of SMEs in the UK at risk of closure. Accordingly, an accountant will manage unpaid invoices before they accumulate and implement a fixed payment structure to minimise or at least mitigate the effects of late payments.
How to apply for the support grant
The £20m support grants will be fully funded by the Government from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The money has been allocated to Growth Hubs within Local Enterprise Partnerships (LEPs) situated in local areas across England.
To apply, it will be necessary to check the list of growth hubs to find the nearest one to you and clicking on it will direct you to the relevant website where you can complete an application form.
The amount of money which can be applied for will obviously depend on personal and local circumstances, but typically will be up to £3,000. Although grants of up to £5,000 may be awarded on a case by case basis.