Liberal Democrats propose a revenue-lost scheme for small businesses
Compensating businesses for lost revenue due to the pandemic has already proved successful in Germany and has been backed by the FSB. The Liberal Democrats now call on the Chancellor to adopt this vital bailout before we lose more small businesses from our communities.
This bold scheme would act as a “furlough for SMEs”, offering compensation to cover a portion of a business’s fixed costs. Any small and medium sized company (employing fewer than 250 people and with an annual turnover below £25 million) would be eligible.
The Government grants would be based on a small businesses’ fall in revenue compared to a period before the COVID-19 pandemic. The small business would have to demonstrate that in the two months leading up to their application they have experienced on average a 30% drop in revenue compared to the same period pre-pandemic.
Businesses would receive up to six monthly grants. The value of each grant would depend on the drop in turnover compared to the same month pre-pandemic.
Each grant would cover a percentage of a business’s fixed costs, up to 80%. This would go towards key expenses such as rent, loan repayments, insurance payments, or even business taxes (it won’t pay for staff costs as that is covered by the furlough scheme).