Self-employed and small businesses are denied vital financial support

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The country has now been stranded for a month, and the government has tabled an unprecedented hundreds of billions of pounds business support plan.

But some workers still fear losing their jobs, and business owners still fear collapse.

Today Money Mail shines a spotlight on the cracks where government money is not going. We can reveal that:

Judith Richards, 64, and her husband Jason, 57, who offer trike tours around rural beauty spots, cannot get grants worth up to £ 25,000 because they don't pay the fees. professional rates

Judith Richards, 64, and her husband Jason, 57, who offer trike tours around rural beauty spots, cannot get grants worth up to £ 25,000 because they don’t pay the fees. professional rates

  • Businesses are still unable to obtain essential public loans. A company that examines NHS workers now has a backlog of 5,000 employees because it does not meet the criteria.
  • Independent business owners are not eligible for assistance because they do not have the paperwork or pay themselves dividends.
  • Workers in new jobs found themselves without income because they are not eligible for layoff.
  • New businesses were denied support because they did not have enough money in the bank.

This comes when the Treasury opened its job maintenance fund on Monday morning and more than 144,000 employers submitted claims for more than a million workers on the first day.

Last week, figures released by UK Finance revealed that only 2.6% of the Business Interruption Loan Program (CBILS) applications were successful – representing only £ 8.7 billion of the 330 billion pledged by Chancellor Rishi Sunak.

Figures from the banking sector showed that only 6,020 loans had been granted last Tuesday, out of 300,000 initial applications and 28,460 applications submitted.

Andrew Goodacre, chief executive of the British Independent Retailers Association, said that about 30% of the 4,000 members of his professional association may not be able to reopen after the epidemic.

He adds: “There is concern that the coronavirus will accelerate the perceived decline of the main street. “

I started my new job too late

Natalie Greenway started a new job after the March 19 fund deadline

Natalie Greenway started a new job after the March 19 fund deadline

Natalie Greenway will be without income for at least three months because she is not eligible for the government leave plan.

She is one of tens of thousands of workers who have started new jobs after the March 19 deadline for the fund.

The Coronavirus Job Retention Scheme allows companies to hire staff while the government pays 80% of their salary, up to £ 2,500 per month.

Natalie, 24, of Burbage, Leicestershire, started a new job as director of customer services on March 16, but her company did not notify HMRC of its first payment until March 31.

She had been employed for two weeks before being put on leave without pay. She was saving for a deposit on a house, so she is not eligible for universal credit.

Anyone saving more than £ 16,000 is not eligible. She says, “The government has written us off as collateral damage.”

But the government has closed some of the cracks. A total of £ 1.25 billion has been set aside this weekend to support start-ups that were ineligible for existing coronavirus support programs.

And the £ 10,000 and £ 25,000 grants for small retail, hospitality and hospital businesses are starting to land in bank accounts.

But some companies and individuals are still on the verge of shortage because they do not fully meet the criteria for financial assistance.

NHS STAFF CONFUSION

The NHS is deprived of front-line workers because a company that checks workers’ qualifications is not getting the support it needs from the government.

Medic Check performs background checks on everyone, from volunteers to surgeons who start working for the NHS, as well as a similar service for nursing homes.

John Burke, 63, who helps manage the business, says he has a backlog of around 5,000 requests because the company cannot get a loan, which in turn delays the hiring of front-line service workers vital health.

Medic Check is one of thousands of companies struggling to seek state aid under the Coronavirus Business Interruption Loan Scheme (CBIL).

The loans are made by High Street banks and the government will assume 80% of the losses. But since the banks still have to bear 20% of the risk, they have asked for detailed financial information and forecasts that companies cannot provide quickly.

John says Medic Check first contacted Barclays for a loan about a month ago. After a brief phone call, the company received an email on April 11 stating that the bank did not think it was eligible.

The company has been asked to provide annual accounts, which John says he cannot do as it was only created in September of last year.

He was also asked to provide a forecast for the next 12 months, which John believes is impossible because he cannot know how the business will be affected by the pandemic.

He also does not think the company is eligible for further support for start-ups as it has not raised £ 250,000 privately in the past five years.

He says the company desperately needs money to buy high-tech scanners for homeworkers. “If we can’t check on the staff, then people won’t hire them,” he adds.

Barclays says he has not yet received an official Medic Check loan request, but is “pleased to review and assist” their request.

A spokesperson adds, “We are dealing with very large volumes of CBILS loans and we are doing everything we can to bring money to thousands of businesses as quickly as possible through the program. “

BRUSHING OF BANKS

New business owners also think they can be disadvantaged when they apply for CBILS loans.

Amy Bracher, 31, has applied for a £ 50,000 loan from Lloyds Bank to keep her business, Phoenix Raven Recruitment, afloat. But she was rejected because she had been exposed to it in the past.

Amy, from Shepshed, Leicestershire, started the business in May of last year and has so far made a profit of £ 75,000. However, his earnings started to decline in early March when companies started to let his temporary workers leave and to suspend recruitment.

However, when she applied for a loan from Lloyds last month, she was turned down. The reasons given by her bank included the fact that she had made her overdraft several times between November and February.

Amy says, “I feel like I am being penalized for having a young business and most people would say that I am doing well for making profits in my first year. This loan plan was my only emergency plan, and without Lloyds’ help, I doubt I’ll have a business by 2021. “

A Lloyds Bank spokesperson declined to comment on Amy’s case, but said, “To be eligible for CBILS or our own support, among a number of criteria, companies must be healthy and viable before the triggering of Covid-19 and have the means to repay the additional loans according to their financial performance before the triggering. “

TOO SMALL FOR HELP

A couple who run a small tourism business in the Yorkshire Dales say they have been “left to their own devices.”

Judith Richards, 64, and her husband Jason, 57, offer trike tours around rural beauty spots and have seen their business grow steadily since its inception six years ago.

The coronavirus epidemic has put an end to business and all household income.

But since it is a husband and wife business run at home, it is not eligible for aid granted to large companies.

They cannot get grants worth up to £ 25,000 as they do not pay professional rates and her husband is not eligible for the job retention program as he is not on the list of pay.

Judith says they have applied for universal credit but will not know if they will get anything before May 2.

The company has obtained a loan from the government-sponsored business interruption loan program, but the money has not yet been deposited into their accounts. Judith adds, “If you are on leave, your employees can claim money that does not have to be reimbursed.

“If you pay professional rates, you can get a grant, but if you are one of the thousands of small businesses like ours, chances are you will get a big loan that you will have to pay back. It will make life difficult. We were hung up to dry.

NOT ENOUGH MONEY

The founder of the start-up Marie Farmer is concerned that she has not raised enough money to be eligible for aid. This week, HM Treasury announced a package of £ 1.25 billion to support new businesses that are not eligible for other rescue packages.

A new £ 500m investment fund, the Future Fund, is designed to help high-growth businesses.

Founder of start-up Marie Farmer fears she may not have collected enough money to be eligible for aid

Founder of start-up Marie Farmer fears she may not have raised enough money to be eligible for aid

And an additional £ 750 million in grants and loans will be provided to small and medium-sized businesses that focus on research and development. Marie, 30, wants to apply for the Future Fund, which is made up of funding from the public and private sectors.

But to be eligible, a business must have raised £ 250,000 privately in the past five years. Marie is the founder of Mini Mealtimes – a family nutrition app.

She and her team started creating the app in 2018 and it launched in January of this year. She has already raised £ 60,000 for the business and is now trying to raise £ 350,000 before the end of May.

But even if she has raised just under £ 200,000 so far, if she does not reach her total, she will not receive any investment money.

Marie, who lives with her four-year-old son August and her husband James, 35, in north London, said: “The coronavirus epidemic has frightened many potential investors.

THIN PICKINGS

Hannah Murphy has seen her fitness business stop but will not know if she is eligible for assistance until June.

The government has announced that it will offer cash grants of up to £ 2,500 per month to the self-employed. But anyone whose profits exceed £ 50,000 per year will not be eligible.

Hannah, 35, of Fareham, Hampshire, launched Globe Fit with her husband Tom, 36, seven years ago and works with 40 independent instructors.

Her overall income is above this threshold, but includes dividends from her husband’s business.

His accountant told him that dividend income should not be taken into account and that his self-employed income would be less than £ 50,000.

Meanwhile, she is not eligible for small business grants of up to £ 25,000 because she pays no business tax, or universal credit because her husband is still working as a project manager.

“I can’t pretend at the moment,” she says. “If my husband is suddenly unemployed, there is nothing we can do but apply for universal credit.”

Other business owners could lose because their dividend income is not taken into account. Those who pay mainly in dividends will not receive 80% of their full income.

RAF freelance journalist and veteran Andy Wasley, 37, was only registered as a sole trader in April last year, so his average earnings will not be partially covered by the plan. government rescue because it does not have a full year of accounts.

He says, “I will not be eligible for any assistance. I feel completely discouraged.

Andy of Sutton, South London, spent 17 years in the RAF, including tours in Afghanistan, before leaving in 2018. He expected to earn around £ 27,000 this year but has now seen all of his future writing commissions will dry up.

A spokesman for the Treasury said, “We are taking unprecedented steps to support public services, businesses and individuals in this economic crisis.

“All of our support is aimed at ensuring that we use public funds responsibly, helping those who need it most, while minimizing the risk of fraud.”

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