Providing vital support to help firms bounce back
Thousands of companies have been taking advantage of an unprecedented package of UK Government support to protect jobs and support businesses 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 is an example of how companies have been helped, and what support is available.
“Where there’s uncertainty, there’s always fear,” says David Hieatt, the co-founder of Hiut Denim.
“If you’re a business owner who’s spent a decade or more building something, facing the prospect of that business disappearing in the space of a month or so is pretty awful.”
Yet when the Covid-19 pandemic struck earlier this year, this was exactly the fate facing many businesses. Hiut had some limited stockpiles of its premium jeans but Hieatt didn’t feel comfortable asking his manufacturing teams to continue coming into work given the threat of the virus. There was a real chance of revenues drying up.
That would have been disastrous for a company that has been a remarkable success story since Hieatt and his wife Clare founded it in Cardigan in 2012. For 40 years, Cardigan was home to Britain’s biggest jeans factory, producing tens of thousands of pairs every week, but it closed down in 2002 with the loss of 400 jobs.
The Hieatts’ mission since 2012 has been to build employment back up, tapping into the local skills base to produce a premium product sold direct to consumers online. Hiut’s manufacturing staff are known as “grand masters”.
BOUNCING BACK: Hiut co-founders Clare and David Hieatt
Until the pandemic struck, the business was growing rapidly, not least thanks to the huge boost Hiut received when Meghan Markle was spotted wearing a pair of its jeans.
David said: “We grew 40 per cent last year and we were hoping for 20 to 30 per cent this year too.
“Suddenly, however, the future looked much less bright.” Hiut’s response was to take advantage of two crucial UK Government support schemes introduced to help businesses make it through the crisis. The company furloughed all of its manufacturing staff through the Coronavirus Job Retention Scheme, which covers 80 per cent of wage costs.
It also took out a Bounce Back loan through the scheme offering up to £50,000 of finance with no interest or fees to pay for a year.
Commenting on the Job Retention Scheme, David said: “I’m not sure what we would have done without the support.”
As for the Bounce Back loan, he said: “This gave us a safety net, because we did not know what the future would hold.” The good news is that Hiut’s staff have now been able to return to work.
Some grand masters returned early to help the company produce scrubs it then donated to the NHS, but the whole production team has been back since 1 June. Demand from customers has proved robust, says Hieatt, so there’s plenty for the team to get on with it.
David said: “It feels like we might come out of this really strongly.”
FINDING A SOLUTION: Staff working at the Sunamp site in East Lothian.
When the Covid-19 pandemic arrived the chief executive officer of East Lothian firm Sunamp, knew the company could respond.
Andrew Bissell (right) said: “A week into lockdown I woke up in the middle of the night and just thought ‘we have to do something that makes the business relevant in this crisis’.”
Mr Bissell turned to Sunamp’s innovative technology, developed in partnership with the University of Edinburgh.
The company has led the way in the manufacture of heat batteries that store heat energy rather than electricity like conventional batteries.
The applications of the technology span several industries, but the company’s focus has so far been on offering a product that replaces the hot water tank in heating systems with something smaller and more efficient.
Recognising the potential of the technology in the context of Covid-19, Sunamp was one of more than 8,600 companies to apply for grant funding from Innovate UK, the UK Government’s innovation agency.
In April, Innovate UK launched the Fast Start initiative, with £40m of funding available to companies responding to the pandemic with some form of innovation.
In the end, Sunamp was one of 800 companies to secure a grant.
The £50,000 award is being used to develop mobile handwash units that can be installed in locations where people lack access to hygiene facilities that can help prevent the spread of Covid-19.
Mr Bissell said: “You don’t need hot water to wash your hands, but it is much more comfortable.
“Right now, we’re dealing with the virus in the summer time, but as we head into winter, if you have to wash your hands outside a railway station or supermarket or vaccination centre, it will be much more pleasant to have warm water.”
The idea has gained traction with Sunamp’s clients, with inquiries coming in rapidly even though the finished product is still in development.
Mr Bissell said: “Covid-19 is a global problem so there’s widespread interest.
“Sunamp has partnerships and licensing arrangements with businesses all around the world through which it sells its heat batteries, so the ambition for the mobile units is international.”
For Mr Bissell, the appeal of the project is that in addition to its obvious commercial potential, there’s a real societal benefit.
“There is no minimising the negatives of Covid-19,” he said.
“But there are many people stepping and doing amazing things.”
Working with everything from gas boilers to solar and heat pumps, Sunamp says its Heat Batteries deliver hot water with efficiency and proven savings of up to 75 per cent on utility bills in residential, commercial or industrial settings.
The types of support on offer to help your company…
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.
- 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.
- Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.
- 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.
6.4 million jobs in England have been furloughed through the Coronavirus Jobs Retention Scheme up to May 31. (8.6 million for the UK)
2.38 million claims amounting to £6,974 million through the Self-Employment Income Support Scheme up to May 31.
70% (UK wide) of those eligible for SEISS made a claim. The average value of a claim is around £2,900.
Details of the support available to businesses across the UK can be found at gov.uk/coronavirus/business-support