The same eligibility criteria apply for both the grant and payroll co-funding options under this scheme. Although initial eligibility will already have been assessed as part of the application process, it will be reassessed periodically during the term of the scheme.
Eligible businesses
Businesses were considered eligible if all three of these conditions applied:
1. They are expecting to incur a loss in the 12 months ending 31st March 2021. For this purpose, the forecast profit or loss should include any mitigating actions they plan to take, such as reducing discretionary spend and managing staff numbers.
2. The business demonstrated it was commercially viable prior to the Covid-19 pandemic. Businesses that did not show profits in their last two annual financial statements prior to 31st March 2020 needed to prove a realistic expectation of returning to profitability.
3. The business is planning to be open in April 2021. This will normally mean that the business is currently accepting advance bookings for next year, and holding deposits against 2021 bookings.
Further guidance
Government cannot be expected to utilise taxpayers’ money to make good all expected losses that businesses will incur during this difficult period. Many businesses will have reserves available that have been built up over a strong historic trading record and this is the type of trading period when these reserves will require to be called upon. It is recognised that some level of reserves will be required to be carried into future trading periods to provide businesses with essential resilience and source of ongoing investment.
While businesses have not been excluded from applying for support beyond September irrespective of the value of reserves available, the expectation is that those businesses with substantial reserves or owners with extensive personal wealth, have not needed to access taxpayer funded support beyond September. Businesses are expected to have made every effort to secure shareholder and / or lender support to mitigate losses in preference to relying on grant funds. Bear in mind that these businesses will already have received considerable support during the March to September period.
Standard support
Eligible businesses will have qualified for standard support where they are expecting to make a loss in the 12 months ending 31st March 2021, and where this level of payment will be sufficient for the business to be able to resume normal operations at the start of 2021 season. Please note the grant payment is not expected to cover all losses. Businesses claiming standard support may also need to rely on their reserves.
Enhanced support
Eligible businesses will have qualified for enhanced support where they are expecting to make a loss in the 12 months ending 31st March 2021, and when the standard grant is insufficient for the business to be able to resume normal operations at the start of the 2021 season. This will normally mean that they are unable to meet all expenses as they fall due after taking mitigating actions such as minimising spend on non-critical staff as well as using available reserves held within the business. The onus will be on businesses to demonstrate this higher funding requirement with further information such as a cash flow forecast. Relatively few businesses have qualified for enhanced support and those that have claimed will undergo additional scrutiny to ensure that this increased level of support is justified.