Coronavirus presents challenges for care homes

13th March 2020

As the care sector knuckles down for the long haul in the fight against the Coronavirus Pandemic, it is important that they too are aware of the options available to financially support their businesses and staff during these difficult times.

The reduction in the Bank of England base rate last week from 0.75% to 0.25% and now 0.1% and the other business support measures introduced by the Chancellor over the last few days, will go some way towards lessening the financial impact for healthcare sector; but for care homes that suffer with an outbreak of COVID19 the financial impact could be huge. 

The measures introduced so far include:

  • For businesses with less than 250 employees, statutory sick pay for Coronavirus related absence will be funded by the government, for 14 days, in full even where employees are displaying no symptoms but have been advised to self-isolate.
  • A fund has been made available for local authorities to help support the vulnerable in their area.
  • A Coronavirus Business Interruption Loan scheme has been announced as a temporary measure and will offer loans of up to £5 million to support SME’s.  The detailed information on how to access this will be available in the coming days but in essence it is an extension of the Enterprise Finance Guarantee scheme which means that the government guarantees up to 80% of the loan to the lender. The first 6 months of the loan will in interest free 
  • support for liquidity amongst large businesses, with a major new scheme being launched by the Bank of England to help them bridge Coronavirus disruption to their cash flows through loans
  • Payment arrangements can be made with HMRC for businesses who have been affected by any temporary financial constraints , i.e. Coronavirus and extends to waiving late payment interest and penalties where there are administrative issues in trying to contact HMRC or to make payment of tax bills.     


Care staff will undoubtedly be classified as key workers and will be covered by the announcement made last night that schools will remain open to look after the children of those needed in the fight against this pandemic. Should they suffer financial hardship mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of Covid-19, including through payment holidays of up to 3 months. This will give people the necessary time to recover and ensure they do not have to pay a penny towards their mortgage in the interim.

As a business, monitoring cashflow and having financial information available when seeking support will be critical. Government loans will be provided through the banks and whilst they may be underwritten they will still have to be repaid. 

Taking steps now to ensure your financial information is up to date to support an application will be key for operators hoping to access working capital funding. 

Bishop Fleming have set up a dedicated web page which brings all the support and advice together in one place this can be found here.
 

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