Economic Resilience Fund (ERF): Restrictions Business Fund & Sector Specific Grant
- Throughout this crisis the Welsh Government has worked hard to support businesses and employees in Wales impacted by Covid.
- Help over and above what is available at a UK Government level has been provided – such as the furlough and the self-employment income support scheme – to put together the most generous package of support for business anywhere in the UK, worth around £2bn.
- More than £1.1bn pounds of Welsh Government financial assistance has already reached businesses to help support them and to protect jobs for individuals.
- More than £770m has been distributed to businesses through the first round of the Non-Domestic Rates grant scheme.
- To date, around £400m has been issued to businesses through phases 1, 2 and 3 of our Economic Resilience Fund (ERF) and through the Development Bank of Wales’ loan scheme. Additional funding has also come from other schemes including the Cultural Recovery Fund and the Sport and Leisure Recovery Fund.
- Working with local authorities the Welsh Government approach has been vital in supporting businesses to deliver support to the vast majority of businesses paying business rates quickly to help them with immediate pressures. In addition to this we’ve worked closely with local authorities to identify gaps and provided discretionary funds for their local circumstances.
- Phases 1 and 2 of the Wales-only ERF saw 13,111 businesses awarded over £290m, safeguarding over 106,300 jobs.
- The ERF Phase 3 has so far seen a total of over 46,000 businesses offered £150m to date.
- To date 80% of ERF (all phases) recipients have been Micro businesses. 98% has been to micro or small businesses.
Package of support:
To support businesses into the New Year, On the 30 November the First Minister announced a £340m package of support directed primarily at the hospitality, tourism and related supply chain sectors.
Following the announcement of further restrictions from the 20th December the Business Restrictions Fund package of support has been enhanced to a £270m package to include non-essential retail businesses forced to close.
The fund will be split as follows:
- £270m ERF Restrictions Business Fund: To provide operating costs support for short term impact for up to 60,000 businesses that are materially impacted as a result of national restrictions. Linked to the non-domestic rates system.
- £180m ERF Sector Specific Support (operating cost) aligned to defined restrictions.
- Continuation of the local authority delivered Local Discretionary Grants
The support available via the package is in addition to UK Government schemes as detailed below.
ERF Restrictions Business Fund:
The ERF Restrictions Business Fund will provide the following financial assistance:
- Businesses in the hospitality and non-essential retail sector that are in receipt of Small Business Rate Relief (SBRR) and have a rateable value of £12,000 or less will be eligible for a £3,000 payment. Tourism, leisure and supply chain businesses qualifying for SBRR will also be eligible for this support if they have greater than 40% reduction in turnover during the restriction period.
- Hospitality and non-essential retail businesses with a rateable value of between £12,001 and £51,000 will also be eligible for a £5,000 payment if impacted by the restrictions. Tourism, leisure and supply chain businesses in the same rateable value bracket will also be eligible for this support if they have greater than 40% reduction in turnover during the restriction period.
- An additional measure to previous rounds, hospitality and non-essential retail businesses with a rateable value of between £51,001 and £150,000 will also be eligible for a £5,000 payment if impacted by the restrictions. Tourism, leisure and supply chain businesses in the same rateable value bracket will also be eligible for this support if they have greater than 40% reduction in turnover during the restriction period.
As with hospitality businesses in the first round of the ERF Restrictions Business Fund, non-essential retail businesses that were previously registered under the firebreak will be paid directly. For non-essential retail businesses without registration, a registration process will be opened in January 2021 and payment made as soon as possible. All information will be available on the Business Wales website and linking through to the relevant local authority websites.
How to access the ERF Restrictions Fund:
Businesses must be on the non-domestic rates (NDR) rating list for their local authority on 1 September.
Businesses who received the Lockdown Business Grant in October via their Local Authority will begin receiving payments via the ERF Restriction Fund into their bank account during December. These businesses will not be required to re-register their details.
For all other eligible businesses to receive any of the ERF Restrictions Fund, businesses will need to register their details, as well as making a short on-line application to their respective local authority for the discretionary elements. These payments will start to reach businesses in January.
Businesses will be able to access the registration and application process to access the funding through the Business Wales and Local Authority websites. Further details on the process will be published shortly.
ERF Restrictions Discretionary Grant
- Local authorities will continue delivering the Lockdown Discretionary Grant to businesses that are materially impacted. As was the case for the Firebreak, this will continue to be targeted at businesses that are not on the non-domestic rates (NDR) system and therefore not eligible for the NDR linked grants. The grant level for this strand would be set at eligible costs of up to £2,000 per business.
- This will provide support to sub VAT sole traders without a property who are materially impacted (>40% reduced turnover) as a result of the restrictions, e.g. cleaners providing services to the hospitality industry.
- Application for the grant can be accessed by visiting the relevant local authority website, or via the Business Wales website.
ERF Sector Specific Support:
The ERF Sector Specific Support (operating cost) package is targeted at Hospitality, Tourism and Leisure (HTL) businesses or supply chain companies who are materially impacted with a greater than 60% impact of turnover as a result of the restrictions.
Eligible businesses will have to be employing staff via PAYE, and either VAT registered or (exempt from VAT) with turnover above £85,000, or limited companies with turnover above £50,000.
Businesses who have accessed the ERF Restrictions Business Fund can also apply for this fund.
For eligible businesses the package of support will provide the following grant awards:
- For single employee business, minimum grant of £2,500
- SMEs (up to 249 employees) - £1,500 per employee up to a maximum of 10 employees, representing £15,000 or for those employing more than 10, £1,500 per employee or self-declared operating costs for the restricted period (whichever is the lower amount).
- There would be an upper limit of £100,000 for SME businesses with a digital system based application.
- Large businesses (250+ employees) - £500 per employee for Welsh headquartered large business applicants to a maximum of £150,000, with a manual case by case application via the sector team.
How to access the ERF Sector Specific Fund:
A triage tool will be available on the Business Wales website by the 11th of December for businesses to check their eligibility for the fund and the fund will open to applications on the week commencing the 11th of January.
UK Government Packages of Support:
Job Retention Scheme:
UK Government has announced an extension of the Coronavirus Job Retention Scheme until the end of March 2021 for all parts of the UK the economic effects are much longer lasting for businesses and areas than the duration of any restrictions.
The policy will be reviewed in January 2021 to decide whether economic circumstances are improving enough to ask employers to contribute more. The Job Support Scheme (JSS) is postponed.
Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
Self-Employment Income Support Scheme (SEISS) Grant Extension
The UK Government recognises the continued impact that coronavirus (COVID-19) has had on the self-employed and has taken action to provide support.
The Self-Employment Income Support Scheme grant extension provides critical support to the self-employed in the form of 2 further grants, each available for 3 month periods covering November 2020 to January 2021 and February 2021 to April 2021.
Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme (BBLS) enables smaller businesses to access finance more quickly during the coronavirus outbreak.
The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
The scheme has been extended and is now open to applications until 31 January 2021.
What other support is available?
Our Business Wales service and the Development Bank of Wales continues to be available to support businesses through a range of support options. The Business Wales Helpline can provide practical information and advice to any businesses experiencing issues because of coronavirus, such as supply chain delays or staffing matters. Support is provided virtually, by phone, video calling and digitally including webinars.
Any business affected is encouraged to visit the Business Wales website https://businesswales.gov.wales/ in the first instance or contact the Business Wales helpline on 03000 6 03000 between 10am-4pm Monday-Friday, who can provide practical information and advice or signpost to relevant agencies and organisations.