Webinar: supporting SMEs impacted by coronavirus

Speakers:

• Deborah Fraser, Director for Regions, CBI (Chair)
• Chris Wilford, Head of Financial Services Policy, CBI
• Ana Isabel Gallego, Senior Sector Advisor, Financial Services Policy, CBI
• Alex Beardsley, Managing Director, ABL Business
• Julia Wilson, Partner, Employment and Compensation, Baker McKenzie

Overview:

Access to finance:

• A range of measures were put in place for SMEs by government, in the shape of loans, grants and the 100% guaranteed bounce back loans.
• We are hearing more members tell us they are able to access these schemes and money is being received. Although issues are still being raised.
• The amount of lending provided by the financial service sector has reached £5.5bn (up £1.4bn from last week), and lenders have received 63,000 applications
• There’s also been a high demand for the bounce back loans, with more than 69,000 applications approved in the first 24 hours. Requirements to apply have been reduced to a short application form, and firms have been able to receive the money within a day.

How to apply for a loan:

• It’s important to understand the financial position of your firm, as this helps you decide which route to go down – as you can’t apply for both CBILS and BBL. If your cashflow gap is below £50,000, BBL is probably best. If it’s bigger, go for CBILS.
• Many lenders aren’t asking for supporting documents, but you should have them to hand to know which product is right for you.
• On CBILS applications, lenders look to see what action you’ve taken to mitigate the impacts of Coronavirus on your business.
• Lenders are looking to assess impact, viability, and affordability, so it’s sensible to think beforehand about how much you need, how you’ll use the funds, and how you intend to pay them back.
• The viability criteria lenders are typically using is whether the business was in financial difficulty as at 31 December 2019. That said, individual lenders have very different credit policies so it’s important to understand the policy of the individual lender.

Returning to work:

• Many employers will have listened to previous guidance and furloughed people. Government guidance has had a real change in emphasis and now says anyone who CAN’T work from home should be encouraged to go to work.
• The government have issued guidance on staying open safely. Businesses need to regularly review this and risk-assess their workplaces with the latest guidance in mind.
• Achieving social distancing in the workplace is the hardest for many SMEs to implement, so the government have given sector specific guidance on social distancing. If social distancing can’t be achieved, the guidance says to think of other steps you could reasonably take to make the workplace safer.
• Employers will need to consider specific employee needs, such as disability (mental or physical), reasonable adjustments, pregnancy etc.
• If employees refuse to return due to concerns of safety/childcare, employers can force them to come back as long as the contract doesn’t have stipulations, or they’ve contractually agreed to home working.
• You should give notice for the return to the workplace. Give people plenty of time so they can plan journeys and address childcare concerns. If you’ve covered the above and the employee still refuses to return to work, you’d pursue as a disciplinary measure. Employees have a right to not be forced to return to work if they consider it a danger to return, so you need to outline to them about steps you’ve taken to make the workplace safe.

Key questions we answered:

1. If a business was turned down for CBILS in April but took out a BBL, can they reapply for CBILS?

• You can’t have CBILS and BBL in tandem.
• You might, however, be able to apply for some of the other support under CBILS, like asset finance/invoice financing.

2. What is the employer’s responsibility around public transport?

• The short answer is that the employer doesn’t have an obligation to get you to work. Employees must look at what they can do to get themselves to work.
• If someone raises a concern about public transport, the employer needs to think about if they will require them to attend work.

3. How does the latest government announcement work in terms of furloughing?

• The furloughing scheme is still ON until the end of June so there’s no immediate need to be calling people back. The announcement gives employers confidence to begin to call people back to work.