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Getting back to work with a financial Covid-19 support package

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Getting back to work with a financial Covid-19 support package

Getting back to work with a financial Covid-19 support package

Thousands of companies have been taking advantage of an unprecedented package of UK Government support to protect jobs and support firms as they attempt to get back to business during the coronavirus outbreak. As more and more companies continue to get back to work, we look at how the financial support is helping firms across the nation to adapt, innovate and protect jobs.

Here are examples of how companies have been helped, and what support is available.

CASE STUDY

KERR’S TYRES & AUTO

When Covid-19 struck, one of Northern Ireland’s leading providers of tyres and automotive services, had just invested £2.5m in a new head office and distribution centre in Antrim and cash reserves were low.

But thanks to their ability to adapt, diversify as well as the invaluable support from the UK Government, Kerr’s Tyres & Auto has been able play a vital role in servicing and keeping the province’s key workers on the road.

Managing director Norman Kerr said: “The Antrim site used up our cash reserves and had a big impact on our cash flow.

“Unfortunately the coronavirus kicked in three months later, when we still didn’t have a chance to build up any cash reserves that we would normally have. So it had a massive impact on ourselves.

“But the problem was we had to continue trading because we supply the food sector and the white delivery van man. So our business had to continue. We had to pay suppliers, we had no choice in it.”

However thanks to a UK Government Coronavirus Business Interruption Loan Scheme loan of £500,000 through the Ulster Bank, as well as the furlough scheme, the family-run business was able to remain solvent and save over 50 jobs.

Norman said: “Had we not been able to get the UK Government loan scheme, it would have had a huge impact on our business. Our business, in essence, dropped probably 75 per cent within the first month. Thankfully that has grown steadily back since then.

ON THE RIGHT ROAD: Norman Kerr, of Kerr’s Tyres & Auto

“We also had to furlough 75 per cent of our staff in month one. As business picked up again and things moved forward, by month two we were probably down to 50 per cent.

“Month three was 75 per cent working and we hope within the coming weeks we will have nobody left on furlough. But again if it wasn’t for furlough, this would have also had a huge impact on cash flow.

“Honestly, when you have 100 staff, it’s a big bill at the end of every month. We would have had no option but to have laid off around 50 staff and there was nothing we could have done about that.

“So the schemes that the UK Government has introduced have been very helpful.”

With 11 branches, including four in the Republic and seven in Northern Ireland, plus a workforce of over 100, the UK Government schemes also gave Norman and his team the freedom to diversify and keep some of the leading supermarkets and delivery firms up and running.

He said: “We had to diversify dramatically in our business. Collection and delivery rather than customers coming to us.

“We had to operate a night shift. So we put four breakdown fitters on our night shift rota. That was to cover the likes of Tesco, Asda and the white van man.

“The delivery men have been working 24/7 because everything is getting delivered at home. So we found the need to have to serve them on a night shift rota.”

With over 20 years business experience, Kerr’s also adapted to ensure Government guidelines were adhered to. Norman said: “Because we did diversification and received the UK Government help we were able to continue to do business and can look forward to the future.”

 ‘A real lifetime in this time of crisis’

CASE STUDY

MADEMOISELLE MACARON

Rachel Hanretty, of Mademoiselle Macaron, fell in love with macarons while living in Paris.

Once Rachel returned to Edinburgh and noticed a gap in the market, she decided to set up her very own macaron business.

After nine months of trading from home and going to food markets, Rachel set up her first bricks-and-mortar store.

She said: “It was in the centre of Edinburgh, it had a view of the castle. It was beautiful.”

But since launching their online store in 2015, and realising that they could send macarons across the country, plus the fact that they had large bookings from both wholesale and wedding customers, the bricks and mortar became unnecessary. The company, which employs eight people, lost all their wholesale customers overnight due to Coronavirus.

Rachel said: “It was really scary. All the weddings, all the wholesale customers, and the bulk of our production disappeared. And then, of course, you have phone calls from people wanting to cancel future orders and refunds.

TASTY TREATS: Rachel Hanretty, below, has used the furlough scheme to keep Mademoiselle Macaron going (Photo Credit: CAROLYN HENRY)

“We entered the cash flow situation whereby the wholesale customers stopped paying the invoices. And we’ve now got over £30,000 worth of overdue invoices.”

But, it’s not all doom and gloom, as Mademoiselle Macaron has started to see an increase in online orders. It’s thanks to the UK Government’s furlough scheme that her business has kept afloat. Rachel said: “The furlough scheme has been a real lifeline in this time of crisis. I asked people to volunteer for furlough. So the people who wanted to and were happy to, they were the first ones to go.”

 

‘We paid creditors and maintained relationships’

CASE STUDY

THE SEREN COLLECTION

With plans for a new spa at his five-star hotel, a Michelin-star chef in his restaurant and the launch of a tour operator business underway, Neil Kedward was looking forward to a good year in 2020.

But when the Covid-19 pandemic struck, the managing director of Wales-based The Seren Collection required urgent assistance from the UK Government’s support schemes to pay his creditors and maintain supplier relationships.

Mr Kedward and his wife Zoe entered the hospitality industry almost by accident in 2007.

He said: “We just happened to come home to South Wales for the weekend and stumbled across The Grove. It was a calamitous trip with lots of wrong turns and family arguments, but we found the owner in, made our offer and that was that.”

FINANCIAL AID: Neil Kedward, of The Seren Collection

Neil and Zoe went on to open two restaurants in Saundersfoot and Oxwich on the back of the success of The Grove.

As if that weren’t enough to keep the team busy, he also spotted a gap in the tour operator market.

Neil said: “ It struck me that there weren’t enough tour operators bringing people into the country. So we started a business called routescape.com, which had a hugely encouraging start, launching at World Travel Market before a big business development trip in 2019. And then, of course, the whole project was wiped out by the virus. We lost every single booking.

“The loan from the Coronavirus Business Interruption Loan Scheme has allowed us to pay off all our creditors and we will be able to relaunch owing nobody any money.”

Help available to companies and workers

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.

VISIT THE WEBSITE

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