The year 2020 has been a rollercoaster ride that the entire world was coerced to get into and to say that it is not a pleasurable experience would be an understatement.
The pandemic, which has forced us to exhibit minimal human contact, has also drastically affected our pockets.
The financial crisis the coronavirus has imposed on us will take years and years to fix and recover completely.
Fostering over why it happened to us is not going to do anyone good. Instead, we must focus on the future and plan to leave behind the crisis and being in the fortunes.
To help the business world, do the same, the government has launched several benefits and schemes. These would help the entire business world make a strong than ever comeback.
The Small Businesses
A small business may not earn an impressive profit margin individually, but when you group all the small and micro enterprises, the collective profit margin is more than substantial.
Even if you look at the numbers, you would realise that the proportion of smaller businesses is much-much higher than the larger ones.
So, the government’s decision to prioritise them was a very wise one.
The government has provided a financial benefit to these businesses so that they can earn about 80% of their profits back.
- Coronavirus Self-Employment Income Support Scheme is helping the small business owner apply for a benefit that would be either 80% of their profits or £2,500, whichever is lower for three months.
- In July, the scheme was extended a further three months with a benefit equivalent to 70% of the profit or £2,190 a month. You can calculate what the amount would be given that the scheme is for three months.
- This scheme applies to businesses, which had earned a profit of £50,000 or less.
So, now someone who had taken effective loans for people on benefits to kick start his business would not have to worry about his dream business becoming a failure in the pandemic.
The Larger Companies
It is not just the smaller businesses that are suffering losses during the COVID-19 crisis. The loss of income is equally worrisome for the more prominent companies.
And that is a problem for the economy as well.
Let me tell you how.
You must have heard of Tesco, it is the biggest retail company in the UK, with more grocery stores than any other.
If Tesco faced losses more than it can handle in the Pandemic, then it would have to wind up its business. This would mean that;
- Its revenue worth over 84 billion USD would not be included in our country’s GDP.
- The government would lose a significant portion of its income through corporate taxes, because Tesco would not be operational to pay taxes on its 1.7 billion USD in profits.
- Lastly, Tesco has an employee count close to 320,000. If it winded up its business, all of these people would become jobless. This would not only put a strain on government treasury, but all make the unemployment rate of our country sky-rocket.
So, yes, the larger companies also need help, and the government would readily provide them. Because if even one of them crashes, the economy will face another setback, recovering from this may seem insurmountable then.
This is why, when the big names asked for help, the government did not hesitate to lend its hand.
Jaguar Land Rover, leading car manufacture in the world, not just in Britain has sought a loan worth £1 billion to become able to counter the losses the pandemic has made them endure.
Tata Steel, an Indian Company, which is the owner of Port Talbot steelworks, has also sought a loan worth £500 million to come out of the pandemic alive.
The British Government understands that businesses are a significant part of its GDP, with the services sector taking up as much as 80% of its value. So, it would never want the economy to suffer, because it would if the businesses suffered in the present crisis.
It was the government that pushed for the emergence of startups and the availability of trending startup business loans for the aspiring business person to take that first step. So, the government could not have left the business sector alone in the wake of a crisis.
Yes, the times we are facing are more than troublesome financially, but the government’s support is going to provide the business sector with some form of relief. And at present, even the slightest help is appreciated.