[Updated] Second Covid-19 lockdown: financial resources available to beauty businesses

With Prime Minister Boris Johnson announcing that a second coronavirus lockdown will be coming into force in England on November 5, beauty salons, spas and mobile/home-based therapists are once again being forced to close their doors. But, what financial help is available to beauty businesses during this difficult time?

During the month-long Covid-19 lockdown, taking place from November 5 to December 2, all non-essential shops and hospitality will shut. However, there are seven key bits of financial support you can tap into to help your beauty business stay afloat.

7 ways for beauty salons, spas and mobile therapists to access financial aid during the second coronavirus lockdown:

1. Extension to the Self-Employment Income Support Scheme

Chancellor Rishi Sunak has said that those who are self-employed will be able to claim state aid of up to 80% of their average trading profits during the month-long lockdown. The scheme will also be extended to cover 80% of profits for the period November – January, up to £7,500. 

This support will apply to England, Scotland, Wales and Northern Ireland and the scheme will then be reviewed in January 2021.

This is an increase from the current 40% on the Self-Employed Income Support Scheme (SEISS) and the enhanced scheme will open for applications from the end of November, with grants being paid faster than before.

The changes will ensure that self-employed individuals who temporarily cannot carry out their business or have suffered reduced demand due to the outbreak are supported over winter.

“The rapidly changing health picture has meant we have had to act in order to protect people’s lives and I know this is incredibly worrying time for the self-employed,” said Sunak.

“That is why we have increased the generosity of the third grant, ensuring those who cannot trade or are facing decreased demand are able to get through the months ahead.”

2. Emergency Business Loan Scheme extension/Top up existing Bounce Back Loans

The Government is extending its Emergency Business Loan Scheme, allowing businesses to “top up” their borrowing during the second Covid-19 lockdown. 

Businesses will have until the end of January 2021 to apply for emergency business loans like the Bounce Back Loans (BBLS) and Coronavirus Business Interruption Loans (CBILS). This extension is two months longer than the existing November 30 deadline. 

“To help more businesses access additional support, deadlines for applications to our Government-backed loan scheme and the Future Fund have been further extended until 31 January 2021,” said Sunak. 

Beauty businesses that have already received funds through the BBLS can also top up existing loans if they need additional cash.

The top-up is meant to help firms that borrowed less than the maximum sum available – up to 25% of their turnover to a limit of £50,000 – to avoid taking on extra debt.

3. Furlough Scheme extension

The Government’s Furlough Scheme will now be extended until March 2021, chancellor Rishi Sunak has confirmed.

The scheme will pay up to 80% of a person's wage, up to £2,500 per month, and employers can choose to top up the last 20% if they wish. The scheme will be reviewed in January 2021.

As part of the revised scheme, anyone made redundant after September 23 can be rehired and put back on furlough. 

"[I want] to give businesses security through the winter. The security we are providing will protect millions of jobs," said Sunak. 

The original Coronavirus Job Retention Scheme was due to end on October 31, so it is hoped this extension will give salon owners some extra financial support for staff while their businesses are closed.  

4. Business premises grants

Business premises in England forced to close will receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. 

Also, £1.1 billion is being given to local authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

5. Mortgage holidays

Mortgage holidays are being extended so borrowers who have been impacted by Covid-19 and have not yet had a mortgage payment holiday will be entitled to a six-month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

The FCA will announce further information about this soon. 

6. Business grants

Businesses required to close in England due to local or national restrictions will be eligible for the following Business Grants:

• For properties with a rateable value of £15,000 or under, grants to be £1,334 per month, or £667 per two weeks

• For properties with a rateable value of between £15,000–£51,000, grants to be £2,000 per month, or £1,000 per two weeks

• For properties with a rateable value of £51,000 or over, grants to be £3,000 per month, or £1,500 per two weeks.

7. Extended Job Retention Scheme

The extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when the UK Government will need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.

The Job Retention Scheme is being extended until December. The level of the grant will mirror levels available under the scheme in August, so the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.

As under the current scheme, flexible furloughing will be allowed in addition to full-time furloughing. The Job Support Scheme will be introduced following the end of the current job retention scheme.

The NHBF is currently speaking with Government regarding business specific support to help with rent, eviction protection, business rates and the swift allocation of hardship grant funding.

This is everything you need to know about Covid-19 lockdowns and restrictions in Wales, Scotland and Northern Ireland. 

Check out our Covid-19 support guide for beauty salons, spas and self-employed therapists, which covers financial aid, mental health tools and advice on adapting your business offering during the pandemic.