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HCR Law Events

24 April 2020

New fund to support Welsh enterprises

If you or your company operates a business in Wales, you may be eligible to benefit from the Economic Resilience Fund, a new fund announced by the Welsh government to support Welsh businesses and charities facing cash-flow difficulties as a result of the Covid-19 pandemic.

This comes after the Covid-19 Wales Business Loan Scheme, providing £100m worth of support to business, was fully subscribed within a week of its launch after receiving around 1,500 applications.

The new Economic Resilience Fund, which went live last week, aims to make available £200m to micro-businesses, SMEs and large businesses of critical social or economic importance in Wales.

To be eligible for this new financial support, businesses, charities and social enterprises must meet the following criteria:

Micro-businesses:

This covers businesses, including sole traders, employing up to nine employees, which:

  • have experienced a reduction in turnover of at least 40% since 1 March 2020
  • are not pursuing other forms of Welsh government non-repayable grant funding support
  • are VAT registered or sector exempt from VAT, with a turnover greater that £85,000
  • have a sustainable business plan to trade beyond the Covid-19 pandemic
  • are not entitled to business rate relief grants.

If you meet the eligibility criteria above, you may be entitled to apply for up to £10,000 of support funding.

SMEs

This covers businesses employing between 10 and 249 employees which:

  • have experienced a reduction in turnover of at least 60% since 1 March 2020
  • are not pursuing other forms of Welsh government non-repayable grant funding support
  • are VAT registered or sector exempt from VAT, with a turnover greater that £85,000
  • have a sustainable business plan to trade beyond the Covid-19 pandemic
  • are not eligible for business rate relief grants or, if they are, that amount will be deducted from their allocation from this fund
  • can demonstrate that the business has either already accessed funding from its bank, or set out why it has not been able to (for example, a deferred application)
  • can confirm that no future compulsory redundancies will be made as long as the Coronavirus Job Retention Scheme (CJRS) is in place.

If you meet the eligibility criteria relating to SMEs, you may be entitled to apply for up to £100,000 of support funding.

Large businesses

For businesses with more than 249 employees, the Welsh government have not published their criteria for eligibility but will instead consider applications on a case-by-case basis to ensure funding is deployed effectively to compliment other sources of support.

The fund will be allocated on a first come first served basis, so if you qualify for support, it is recommended that you apply as soon as possible whilst ensuring that your application is as strong as possible. You won’t have time to ‘learn on the job’ when it comes to these applications and will want to get it right first time.

If you are considering making an application for funding under the Economic Resilience Fund, our multi-disciplinary team can help – it comprises accounting, financial, and banking law experts who have experience of raising debt, CBILS applications and special situations finance.

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About the Author
Jody Coleman, Solicitor

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