Third phase of Economic Resilience Fund opening tomorrow – with new rates grant support for businesses

Businesses across Wales will soon be able to access firebreak lockdown support and the wider Economic Resilience Fund from tomorrow.

The new phase of the fund was announced by Economy Minister Ken Skates at the end of last month, which initially saw £140m being made available to businesses.

Following First Minister Mark Drakeford announcement of a two week firebreak, the Economic Resilience Fund was ‘enhanced’ to almost £300m, which includes an extra £150m to support to businesses affected by the firebreak. It also included an additional £20m added to the the £80m fund already announced to help businesses develop in the longer term, of which £20m has been ring-fenced for tourism and hospitality.

The Economic Resilience Fund previously required companies to provide a percentage of match funding to access grants. However the Welsh Government has now confirmed it will provide 100% funding for businesses forced to close during the firebreak. This includes:-

• Micro businesses (employing between 1 and 9 people) will be able to apply for up to £10,000 on the condition they match this with their own investment of at least 10%; For Tourism and Hospitality micro businesses and those micro businesses forced to close due to the short Fire Break lockdown there will be discretion for grant awards of up to 100%;
• SMEs (employing between 10 and 249 people) will be able to apply for up to £200,000. Small businesses (up to 50 employees) will be required to match this with their own investment of at least 10% and medium businesses (between 50 and 249 employees) with at least 20% of their own funding; For Tourism and Hospitality SME’s and those micro businesses forced to close due to the short Fire Break lockdown there will be discretion for grant awards of up to 100%;
• Large businesses (employing 250+ people) will be able to apply for up to £200,000 on the condition they match this with their own investment of at least 50%.

At yesterday’s Welsh Government press conference we asked for an update on the fund after several businesses had been in touch having expected the ERF to have opened that morning, as it is due “from the week commencing 26th October”.

Health Minister Vaughan Gething, who took the briefing, reiterated the support being offered but did not explain why it had not yet launched, or when it would be opening.

We also asked Wrexham Council about the progress of business rates grants, and how they would be administered with a spokesperson telling us: “Wrexham Council will be administering the Lockdown Business Fund and business rate payers will be required to submit an online application. The scheme will go live very soon and once the final guidance is provided, the Council website will be updated with the relevant eligibility criteria and application links”.

It is now understood the Economic Resilience Fund will open tomorrow, along with the Lockdown Business Fund.

The Lockdown Business Fund is a fund to provide financial assistance to businesses that are facing operational and financial challenges caused by the national lockdown announced for Wales as a result of COVID-19.

The purpose of the fund is to support businesses with cash flow support to help them survive the economic consequences of the restrictions put in place.

The grant will be open to applications from tomorrow and will close at 5pm on the 20th November or when the fund is fully committed, and is being administered by local councils across Wales on a first come first served basis. Although not live yet, the Council is circulating the following address that will house information and applications as and when it goes live: https://www.wrexham.gov.uk/service/covid-19-support-businesses

There are two forms of lockdown grants – a Lockdown Business Rates Grant which has two tranches, much like the business rates grant earlier this year and will require an application.

A grant of £5,000 is being made available for retail, leisure and hospitality businesses that have been forced to close, as defined by the regulations, and occupy properties with a rateable value of between £12,001 and £51,000. A grant of £1,000 is being made available to all businesses eligible for small business rates relief (SBRR) in Wales with a rateable value of up to £12,000 (for further details and exemptions see guidance document).

Businesses eligible for small business rates relief that have been subject to local restrictions for 3 weeks or more and have been materially impacted (>50% reduction in turnover) up to the 23rd October will be eligible for a further grant of £1,000

Businesses eligible for small business rates relief that have been forced to close, as defined by the regulations, as a result of the national firebreak lockdown will also be eligible for a further top up grant of £2,000 from their local authority.

The other part of the Lockdown Business Fund are Discretionary Grants, one being £1,500 for businesses that were forced to close due to the firebreak lockdown or are able to demonstrate that the national firebreak lockdown will result in at least a 80% reduction in their turnover for that period.

Another is £2,000 for businesses forced to close, as defined by the regulations, as a result of the national firebreak lockdown and have been subject to local restrictions for 3 weeks or more up to the 23rd October and experienced at least a 50% reduction in their turnover for that period.

Businesses can’t apply for both, and you can’t get these grants if you have had the business rates grants above – or if you have over 50 employees or “if the business generated less than 50% of your income, the business must be your main source of income”.

Last week Ken Skates said: “We are making almost £300m available to provide more financial assistance to our small and medium employers and to businesses in the hospitality, tourism and leisure sector that must close their doors during the firebreak.

“This means an additional £150m going direct to Welsh firms to help them cover their bills and increase their resilience to help them through the challenging weeks and months ahead.”

“The Economic Resilience Fund, which has been designed to plug the gaps in the UK Government’s support package, has already been crucial in protecting companies across Wales from the severe impacts of coronavirus, safeguarding more than 100,000 jobs.”