The Welsh Government has announced more details of its £400m in grant support to businesses impacted by the deepening economic malaise from the Covid-19 pandemic.
Funding for micro-businesses (defined at employing between 1-9 and in addition to the owner), will be entitled to grants of up to £10,000.
However, non VAT registered businesses, which cover the vast majority of start-ups created over the last two years, will not be entitled to grant support.
For qualifying SMEs, employing between 10 and 249 staff, funding of up to £100,000 will be available.
Funding for larger firms will be made on a case by case basis and could exceed £100,000.
Applications will go live next Friday.
The £400m forms part of the Welsh Government’s £500m Economic Resilience Fund (ERF) unveiled by First Minister Mark Drakeford on March 30th.
Some £100m has already been assigned to a loans scheme being administered by the Development Bank of Wales with funding of up to £250,000, with the 2% interest deferred for a year.
Now the Welsh Government has announced a second tranche of funding under ERF, of £200m in grant support targeted at micro-businesses, SMEs and larger firm, as well as social enterprises and charities.
The ERF is on top of the Welsh Government’s Covid-19 emergency support of £1.2bn. This includes grants of £25,000 and £10,000, depending on the rateable value of commercial premises, and business rate holidays on premises up to rateable value of £500,000.
However, those firms being supported under the £1.2bn support package will be not eligible to support under the £400m grant element of the ERF.
Micro-businesses, employing up to nine employees could be eligible for up to £10,000 support. This includes sole traders employing staff.
Businesses in this bracket could qualify for support if they:
- Have experienced in excess of a 40% reduction in turnover since March 1, 2020.
- Can demonstrate that efforts have been made to sustain business activity
- Are not pursuing other forms of Welsh Government non-repayable grant funding.
- Supported firms must aim to maintain employment for 12 months.
Small and medium sized firms with between 10 and 249 employees could be eligible for grants of up to £100,000 if they:
- Have experienced in excess of a 60% reduction in turnover since the first day of March.
Aren’t eligible for business rate relief grants, or if they are, that amount would be deducted from their allocation from this fund.
- Have a sustainable business plan to trade beyond the Covid-19 pandemic.
- Confirm no future compulsory redundancies will be made as long as the Coronavirus Job Retention Scheme is in place.
- Are not be pursuing any other form of Welsh Government non-repayable grant funding support.
Funding will also be available to support large businesses with more than 249 employees. Applications will be considered on a case by case basis to consider where funding can be deployed most effectively to compliment other sources of support.
Economy Minister Ken Skates said: “This is another important step to providing businesses, charities and social enterprises with the support and reassurance they need at an incredibly difficult time.
“We are making the next £200m available through the fund – a substantial amount of money. It will be available to firms who pass the eligibility criteria and is designed to help those businesses and charity organisations who are struggling with cash flow problems.
“The fund will go live for applications next week, but I must reiterate the importance of those considering applying to go through the guidance to establish whether they are likely to be eligible.
“This fund will reach a significant number of businesses, charities and social enterprises, but it’s clear it won’t reach all.
“That’s why we’re calling on the UK Government to provide further financial support for Welsh firms to help steer them through this incredibly difficult period. We also need to see funding from the schemes they have announced reach businesses much quicker than they currently are.”
Finance Minister Rebecca Evans said: “This fund is part of more than £2bn of support that we have made available to help businesses and charities during these difficult times.
“Support for business is crucially important, and it is an issue which dominated discussions when I met with the Chief Secretary to the Treasury and devolved Finance Ministers on Thursday.
“It is clear that whilst we are doing all we can in Wales to plug any gaps and provide the best possible financial support to businesses, there are further steps that the UK Government needs to urgently take.”