The Welsh Government have announced a start-up grant to support new businesses dealing with the severe impact of Coronavirus.
The fund will be worth £5m initially with flexibility for the future. It will support start-up firms, which fall outside the UK Government’s Self Employment Income Support Scheme (SEISS) as they only began trading in 2019.
Applications for this grant will open today, at the same time as phase two of the Economic Resilience Fund opens to applications.
First Minister Mark Drakeford said:
“Today’s announcement will help to support new businesses in Wales which are currently falling through the gaps of existing financial assistance schemes.
“A number of people who have started a business in the last year don’t qualify for support from the UK Government’s Self Employment Income Support Scheme and it remains unclear if it will take steps to ensure they will change the criteria to help this group of people.
“This is why we have acted and set up a start-up grant. This has come from our work with Welsh Local Government Association and local authorities to look at what more support the business community needs at this time.”
The new start-up grant will support up to 2,000 businesses in Wales, with £2,500 each. This will provide crucial funding to people who established their businesses between 1 April 2019 and 1 March 2020, helping them to continue trading through the pandemic.
The Welsh Government is providing £1.7bn to support businesses in Wales, making it the most generous and comprehensive package of assistance in the UK.
Figures from the Office for National Statistics show this comprehensive package of support is reaching those who need it most – 34% of business in Wales have benefitted from Welsh Government or UK Government coronavirus support, compared to 14% in England and 21% in Scotland.
The support available in Wales includes more than 59,000 business rates grants worth more than £715m and the Development Bank of Wales Covid loan support, which has helped 1,000 small and medium enterprises.
To be eligible for the start-up grant, businesses must:
- Have not received funding from the Welsh Government’s Economic Resilience Fund or the non-domestic rates grant.
- Have been set up between the 1 April 2019 and 1 March 2020 and have not qualified for the UK Government’s Self Employment Income Support Scheme.
- Have less than £50,000 turnover.
- Have experienced a drop in turnover of more than 50% between April and June 2020.
Applicants will need to submit a two-page application form and self-declaration supported by evidence.
Applications for the start-up grant and the second phase of the Economic Resilience Fund open from 29 June.
Economy Minister Ken Skates said:
“Today’s announcement will be crucial in supporting new businesses, reducing the risk of firms having to close and people becoming unemployed.
“Our Economic Resilience Fund has already supported thousands of businesses across Wales to plug the gaps left by the UK Government’s package of support and the start-up grant complements this work.
“The second phase of the Economic Resilience Fund will open for applications on Monday providing more opportunities for microbusinesses, SMEs and large businesses to apply for funding. Submissions for the start-up grant can also be made from Monday and I’d like to thank local authorities, which will be administering this scheme.
“As a government, we continue to work hard to respond to the needs of business at this incredibly testing time.”
Minister for Finance and Trefnydd Rebecca Evans said:
“We have prioritised protecting the Welsh economy from the impact of coronavirus by providing the most generous business support package in the UK – support which represents 2.7% of our GDP. But our budget only goes so far and we have had to make some difficult decisions.
“That is why we are calling on the UK Treasury to lift the rigid restrictions on fiscal flexibility so that we can begin our road to recovery and plan for a prosperous, post-pandemic Wales.”
Councillor Rob Stewart (Swansea), WLGA spokesperson for the economy said:
“Local authorities have administered more than £700m of business support grants by Welsh Government, which have helped thousands of businesses across Wales in their time of need. We’re pleased that new businesses will now be able to apply for start-up grants, which will give cash flow support to some eligible businesses to help overcome the economic repercussions of the crisis.”