Its hard to imagine a time when the words “Brexit” and “coronavirus” didn’t form part of our vocabulary. It’s been a tumultuous few years. However, at least I’ve finally learned to stop speculating about what will happen next.
Instead, I’m focusing on the present … and right now it’s a bit of a balancing act.
At Ortus, we pride ourselves on service excellence. We try to give brokers and borrowers what they want, quickly and efficiently. Bridging has never lent itself to long periods of analysis and reflection. It is about fast and reliable decisions. We want to keep on providing this and, so far, I think we’ve managed to do so. Last week saw three completions and the pipeline is looking really strong. We are absolutely still lending and we hope to continue meeting new brokers (albeit via phone and teleconference) and discussing opportunities.
However, our job is to calculate risk and we cannot ignore what is happening in the world right now, or pretend it is somehow irrelevant to the lending sector. This has led to some difficult conversations with brokers about sector risk, residual values and unrealistic business plans. Most brokers – especially the experienced ones – have welcomed these conversations and the deals are moving forward.
As always, the key is just to be honest and solution-focussed, without being naive. If a deal has to complete next week and the valuation hasn’t been done, its clearly going to be a challenge in this environment. However, if a valuation was done 6 months ago a desktop update might work. A proposal involving a start-up business, especially if its in the leisure sector, has to factor in a very long period before trade can build up … 3 or 4 months definitely isn’t enough. And we are inevitably going to focus our underwriting heavily on financial contingencies and back-up plans.
So, I’m not going to say its business as usual. I’m also not going to say that everything has changed. I would say we’re in fairly unchartered territory and we won’t apologise for treading a bit carefully. However, in the same way we need brokers to keep showing us deals, we recognise that brokers – and borrowers – still need us. And we absolutely intend to deliver.
In an effort to provide something useful to our introducers, we have summarised below the key elements (in our view) of the government assistance we believe is available to businesses. It has changed a few times since the help was first announced and I’m sure it will do so again. However, it is our understanding of the position at the time of writing.
On behalf of myself and all my colleagues at Ortus, we send you our very best wishes.
Coronavirus Job Retention Scheme
- HMRC will reimburse 80% of wage costs for “furloughed” employees, up to a cap of £2,500 per month, provided they are on the PAYE system
- A “furloughed” employee is one who would have otherwise been laid off during the crisis
- The scheme is backdated to 1 March 2020 and will be available for at least 3 months
- HMRC are setting up an online portal so employers can make claims. It should be operational by end of April
- VAT does not need to be paid between 20 March and 30 June 2020, but the amount deferred will still need to be paid by the end of the 20-21 tax year
Hospitality, retail and leisure
- These sectors will receive a business rates holiday for the 2020-2021 tax year
- These businesses will also be eligible for a grant of up to £25,000 where the rateable value of the premises is between £15,000 and £51,000 and your business is based in England
- Your Local Authority should write to you if you are eligible for this grant
Other small businesses
- A grant of £10,000 will be made available to small businesses currently eligible for Small Business Rate Relief
- Your Local Authority will get in touch if you are eligible for this grant. You do not need to apply
- Funding will be provided to Local Authorities by central government in early April. It will then take time to disperse these funds
Statutory Sick Pay relief
- Refund will cover up to 14 days of SSP per eligible employee without GP sick note being required
- Only employers with under 250 staff are eligible
- It is likely this relief will be offset against PAYE liabilities
Please note that this summary has been prepared based on government information and is not advice. You should discuss your own situation with your own professional advisers before acting on any information contained above. We accept no liability for any indirect or consequential loss which occurs as a result of this message