One month into lockdown and people are starting to really feel the effect which is most noticeable on the high street with large retailers going into administration. With little prospect of the lockdown being lifted in the near future, or recurring lockdowns likely, now seems a good time to review your business position and make sure you are doing all you can to weather the storm.
Whilst initially many businesses valiantly tried to diversify and offer creative solutions in the face of the crisis, it seems that for some this became increasingly difficult in light of social distancing advice with many businesses now ceasing business activity entirely. Whilst the Government has temporarily relaxed some planning constraints in relation to change of use provisions, any businesses that have successfully managed to do this should also be careful to ensure that any change of use to the premises, (such as cafés being used for takeaway services) do not inadvertently breach lease covenants. If you do change the use of the property, make sure you have consulted your landlord, obtained consent and documented it properly to avoid any challenges later.
If you are a small business in receipt of small business rate or rural rate relief you should benefit from the £10,000 grant or if your business premises falls within the definition of retail, hospitality or leisure and has a rateable value of less between £15,000 and £51,000 you may be entitled to a £25,000 grant. Even if you are not sure whether your property would qualify, it is better to check as these definitions may be applied more broadly than you think. You may find the following links helpful if you wish to apply:
Landlords with mortgages should not ignore the Government’s three month mortgage holidays, as they in turn are expected to pass on any such benefit to their tenants. Make sure you speak to your lender directly about what they can do for you but bear in mind that this does not stop interest accruing which will have to be paid back later and the term of the mortgage may be extended. If you do incur interest, discuss this with your tenant, maybe they will be able to pay the interest rather than the entire rent payment so that you do not lose out. Some commercial lenders may have their own internal coronavirus policies and schemes. Make sure you mention that the difficulties are being caused by the coronavirus in order to take full advantage of these.
If you are a guarantor under a lease, it may be worth checking in with the tenant to see how they are fairing and whether they are likely to default on their obligations for which you may then be liable. It maybe helpful to know in advance if you are likely to be called upon and perhaps, it is worth considering whether contributing something to help the tenant now may mean that you are not called upon for the entirety of the payment later.
Make sure you have checked with your accountant to see whether you can benefit from some of the tax deferment schemes that are available or consider whether you would like to take advantage of any of the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank or for larger firms the Bank of England has a new scheme to assist with cashflow.
You can find more detail of the help available through this link: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Sales and purchases for vacant properties are still proceeding and for those that are not vacant we are still progressing transactions as far as possible to ensure swift completion once lockdown restrictions are lifted. If you are interested in Commercial Property or are a Landlord or Tenant and would like further advice on any Landlord and Tenant issues, please contact Cheryl Smith or Fiona Squire by emailing Cheryl Smith or Fiona Squire. Don’t forget to follow Cheryl on Twitter @BoyceHatton_CS
The content of this article is correct as at the date of posting and is for information purposes only. Whilst we try and ensure it is accurate we do not warrant or guarantee that this is the case, nor do we accept any responsibility in the event that it is relied on. The information is not intended to be a substitute for legal advice which you are recommended to obtain.Back to News