Revenue Generation Methods – The recent surge of global unemployment has radically increased the number of entrepreneurs, new job seekers, and money-making methods. This drastic change has also shifted the interest of business-minded people to switch to guaranteed acceptance loans and other income sources.
Primarily, new businesses have begun emerging with the assistance of government schemes, financial loans, etc. However, existing business owners still suffer a massive loss in training new employees and hiring recruits.
The ongoing COVID-19 pandemic curbing situation has not uplifted the morale of the business owners. However, organizational owners have started finding new sources of generating revenue.
Rising Revenue Generation Methods
In most cases, secured and unsecured loans for unemployed may help to attend to personal needs but not a business. In March 2020, the British government offered business grants, loans, and self-employed workers a chance to apply for the Furlough Program.
The program offered a chance for companies to fulfill 80% of employee wages in the UK. It helped to save the jobs of 9.3 million workers. According to sources, many businesses survived with the assistance of the program.
Moreover, the program costs might cross $371 billion as the fiscal year ends. Besides this, the UK government Chancellor Rishi Sunak announced a Winter Economy Plan. It has helped businesses suffering due to COVID-19.
Through these methods, the UK government has kept unemployment down. Business owners have made use of loans with guaranteed acceptance to curb their ongoing debt, build market credibility, and generate more revenue.
Bounce Back Loans
Under the Bounce Back Scheme, small and medium enterprises (SME’s) took £50 billion guaranteed loans. The Office of Budget Responsibility in the UK estimates that it could cross £76 billion within the loan scheme.
Bounce back loans provide SME owners to borrow between £2,000 and £50,000. The highest amount is possible after showing a 25% turnover. The UK government wouldn’t charge interest on these 100% guaranteed loans for 12 months.
The option is available for all types of SMEs, excluding banks, public sector bodies, state-funded schools, and insurers. Borrowers can check out lenders and eligibility criteria on the official UK government website.
Job Retention Scheme
Although the Furlough Scheme recently ended on 31st October 2020, it had a significant impact on the economy and employment. It got replaced with the Job Support Scheme. This scheme is associated with the job layoff due to coronavirus.
The Coronavirus Job Retention Scheme permits employers to make employee salary payments partially. Accessing this scheme requires recognizing “furloughed workers” in the company and notifying them of the circumstances.
Other criteria for employees to become eligible for the scheme include 20% of regular working hours and no redundancy notice.
Furlough refers to leave of absence granted to employees due to coronavirus. The HMRC reimburses 80% of the wage costs of the furloughed worked. However, it has a maximum limit of £2,500.
The Job Support Scheme began on 1st November 2020, would last for the next six months. Moreover, the scheme is available to employers that didn’t opt for the initial Furlough Scheme. SMEs may not face any eligibility issues; however, large businesses would have to showcase adverse effects on the turnover due to the pandemic.
The scheme working methods includes the payment to the furloughed employees for their working hours. The cost is split between the government, employer, and employee using a wage cut. The maximum monthly government contribution through this program is £1541.75.
Therefore, a furloughed employee on minimum working hours would receive two-thirds of pay. 5% of the amount would get deducted from the employer and the remaining 61.67% from this government program.
Statutory Sick Pay (SSP)
Recently, the government announced the launching of SSP to help employers and small businesses reclaim two-week sick pay. Employers with less than 250 employees and carrying an NHS 111 isolation note can apply for SSP.
This government scheme also requires the employers to retain the employee limit as of February 2020.
Launched on 23rd March 2020, the Coronavirus Business Interruption Loan Scheme (CBILS) supports SMEs to access short-term loans. It also assures accreditation from the lenders. CBILS can assist with a maximum limit of £5 million to overcome deferred or lost revenue and causing cash flow disruptions.
As part of the CBILS, the UK government would assure 80% of the loan to the lenders. It would do so that the lenders continue to lend money to SMEs. Moreover, the government wouldn’t issue any guaranteed charge to the banks or businesses.
Thus providing no-cost security to its lenders and increasing borrowing options for the SMEs. The two significant criteria for acquiring the CBILS is to have a UK based business and a maximum annual turnover of £45 million. The list of scheme rules and accredited lenders is available on the official government bank website.