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May 3rd 2020, by Calvin Cooper

On Friday 1st May, Orkney Islands Council went live with their new 'Business Hardship Support Grant Scheme'.

We must commend OIC on rolling out a programme like this so quickly; hardly any other local authority area our clients deal with has dipped into their own reserves in this manner. This shows that OIC really do get behind the entrepreneurial spirit of us Orcadians.

What follows is our simple breakdown of the guidance to see how this might help you and your business.

Before we get going - upcoming Zoom call

Sometimes watching and listening is easier than reading and interpreting.

So we invited Claire Kemp, Business Gateway Orkney's manager, along for a chat over Zoom, to discuss this nitty gritty of this scheme and how it impacts you.

We went live at 16.00 on Monday 4th May. But if you missed it, fear not! We recorded our chat - just 30 minutes long - and we're more than happy to send you a copy of the recording to watch at your leisure.

To get a copy, drop an email here and we'll send it across to you.

Claire Kemp, manager of Business Gateway Orkney

That said, if you're still wanting to read our thoughts on what this grant entails, let's dive in . . .

How much is up for grabs?

There are three grants levels - £5k, £10k and £15k - allocated depending on the size of your business.

What 'size' of business gets which grant?

This is decided based on Full Time Equivalent (FTE) workers, which includes the owners of the business. The bands are as follows:

  • 1-5 FTE workers = £5k grant
  • 6-10 FTE workers = £10k grant
  • 11+ FTE workers = £15k grant

1 FTE = 1 person working a 35 hour working week. And no, if you work a 70 hour week, that does not count as 2 x FTE's.

I just work part time and have another job elsewhere. Do I qualify?

If you work at least 35 hours a week in your own business, then you will probably qualify (subject to the other points below).

However, if your own business is just something you do in the odd evening and weekend around your main job, this scheme unfortunately isn't aimed at you.

I don't have any employees, but have some sub-contracted workers. How much can I claim?

If you are the only worker in the business, it's our understanding that it's only you who counts towards the FTE, meaning you would potentially fit into the £5k grant band.

Your subbies would have to apply to OIC separately in their capacity as self employed business owners, respectively.

The FTE test is in relation to employees, plus yourselves as business owners (if you're not formally on the payroll).

What does this grant cover?

This grant is not simply for loss of income or loss of profits. It's aimed at helping those in true financial hardship. Therefore, OIC's officials will assess the hardship of your business due to COVID-19 upon receiving your application.

OIC note that any hardship caused by personal/household expenses will not be considered for this funding. Again , this is purely for hardship caused to and by your business.

So far, the government's schemes have largely been dished out on a 'no questions asked' manner. However, we appreciate that as OIC are being quite proactive in offering businesses an additional degree of financial support at this time, they need to take an increased level of care in ensuring their reserves are wisely utilised.

Is this repayable?

No. This is a grant, not a loan.

You keep 100% without having to repay it.

There is one wee caveat with this: as OIC say this is to cover hardship due to your business being ineligibile for the other government grants, it is not impossible that OIC will reserve the right to seek repayment if the government subsequently announces further grant assistance which you can qualify for. This has not been confirmed or denied by OIC, so we would advise caution over spending all of any subsequent grants, in case some of this becomes repayable to OIC.

I've managed to claim other Coronavirus grants. Can I still claim this?

Potentially not. This is really aimed at businesses who have been ineligible for other government support. However, you might potentially still qualify in certain circumstances.

If you have claimed the Business Support Fund grant (the £10k and £25k grants, decided based on your non-domestic business rates situation), then you will not ever be eligible for this new grant.

If however you have been in receipt of the Job Retention Scheme payments (for furloughed workers), or the Self Employed Income Support Scheme grants, you may still be eligible for this grant.

If you're in receipt of these, you must be able to demonstrate that these are insufficient to help your cashflow hardship, i.e. that your business is still (and will still be) struggling!

What else do I have to demonstrate?

You must have taken all steps to reduce your business outgoings.

This can include; taking rent and loan payment holidays, reducing overheads where possible.

You must also show that your business has viable plans to prosper after COVID-19 has passed, and that your business will have a direct economic benefit to Orkney.

Your business must also be registered/located in Orkney, understandably.

How do I apply?

Firstly, you submit an eligibility check in OIC's website here.

Within 2-3 days, if eligible, you should receive an application form.

If successful, you should receive the money within 10 working days.

I don't think I qualify for this. What else is out there?

There are a number of other measures available, both from the UK government and the Scottish Government. These have been touched on in our other articles on this website, within the 'COVID-19' section. You can find all of these here.

Last thoughts

As we said at the top, we're delighted to see OIC taking this proactive approach to supporting local businesses. We also think this claim system is fairly balanced, and helps smooth some of the gaps & issues which have arisen with people missed by the government's schemes.

As always, if you have any questions on your situation and want further clarity, feel free to contact us and we'll be more than happy to help!

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