The latest phase of the Welsh Government’s Economic Resilience Fund has benefited from the release of a further £100 million from ministers within 72 hours of launch, due to a massive demand.
More than 6,000 grant applications from small and medium sized businesses and social enterprises were received within 24 hours of the launch on Friday – an unprecedented response, revealing the scale of the challenges facing Welsh businesses.
The fund aims to complement and fill the gaps left by UK government schemes such as the Job Retention Scheme, with grants of up to £10,000 for micro-enterprises and up to £100,000 for SMEs and a light touch appraisal system designed to get money to businesses with the minimum of delay – as well as a new loan fund administered by the Development Bank of Wales.
Less than 3 weeks since the First Minister announced the intention to create the fund, the Welsh Government has released a further £100 million, taking the grant fund to £300 million. This will supplement this latest phase of support, providing non-repayable grants to microbusinesses, SMEs and those large businesses of critical, social or economic importance to Wales.
The fund has been warmly received by trade union and business organisations, with the Institute of Directors calling it ‘very welcome news for business owners and managers who are desperate for all the help they can get at this difficult time’. The South and Mid Wales Chambers of Commerce has called ‘the rapid response to date’ of the Welsh Government in supporting the economy of Wales ‘impressive’. The Wales TUC welcomed ‘additional funding to address the gaps’.
Minister for Economy, Transport and North Wales Ken Skates said:
“We knew that even with the help offered by initiative such as the Job Retention Scheme, there was a massive need for quick access to grant funding if Welsh businesses were to survive this unprecedented economic shock. Whilst in order to make the scheme quick and simple we needed to take tough decisions over eligibility – like requiring businesses to be registered for VAT as a way of having to check on their trading history - it is clear from the level of response received that the Economic Resilience Fund is plugging a gap in UK government support and providing much needed financial reassurance to many businesses at this challenging time. We will continue to review support and consider how we can develop it over the coming days.
“The rate of applications has been massive and unprecedented. This is the second time in a matter of weeks that access to Welsh Government funds aimed at easing cash flow pressures for Welsh business have quickly reached capacity, and we have responded with pace to release a further £100 million into this phase of the fund.
“In these difficult and demanding economic times we have worked hard to free up resources to create such a large fund despite the huge demands on our budget, and to strike a balance between supporting as many enterprises as possible and making a meaningful contribution to each one’s survival, as well as asking each recipient to sign up to the principles of the economic contract.
“Though we applaud much of what the UK government has done, there is an urgent need to see more of the promised lending guaranteed by the UK government getting to the front line. The UK government must continue to support and press the high street banks to be much more responsive to the needs of our businesses at this difficult time."
Finance Minister Rebecca Evans said:
“The Economic Resilience Fund is part of more than £2 billion of support that we have made available to help businesses and charities during these incredibly difficult times.
“We know that support for business is crucially important but whilst we are doing everything we can in Wales to plug any gaps and provide the best possible financial support to businesses, it is clear there are further steps that the UK government needs to urgently take.”
The Economic Resilience offers financial support to help businesses, charities and social enterprises deal with the coronavirus crisis and will be vital in helping organisations manage cash flow pressures. It is a unique additional funding stream for Wales and was designed to address gaps not currently met by schemes already announced by the UK government, Welsh Government and Development Bank of Wales.
The first stage of the fund saw the £100 million Development Bank of Wales’ loan scheme fully subscribed in little more than a week. Applications are currently being processed and some businesses have already received funding. It is anticipated that the Development Bank will have processed all applications received within the month.
To ensure that money reaches businesses as quickly as possible more than 120 additional Welsh Government and Business Wales staff have been diverted onto processing applications and supporting businesses and organisations in this latest stage of the fund.