Businesses forced to shut due to local coronavirus lockdowns will be able to claim up to £1,500 ($1,948) per property every three weeks.
The Treasury announced the support package today following a decision to ban social gatherings in England of over six people.
To access the new grant businesses in England must have been required to close due to local COVID-19 restrictions.
Large firms will receive £1,500 every three weeks they are required to shut whilst smaller companies will receive £1,000.
Chief secretary to the Treasury Steve Barclay said: “These grants provide businesses with a safety net as they temporarily close their doors to help save lives in their local areas. As local economies eventually and carefully re-open after local interventions, our Plan for Jobs is there waiting to help businesses get back on their feet, protect jobs and thrive in the future.”
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Business secretary Alok Sharma said the package would offer additional “breathing space” for businesses that have had to temporarily close.
Mike Cherry, chairman of the Federation of Small Businesses, welcomed the “critical” intervention, which would give a “financial lifeline” to those most harmed.
Firms that occupy premises with a rateable value less than £51,000 will receive £1000 whilst those with a higher value will receive £1,500.
The grants will be distributed by local authorities who will also receive an additional 5% business support funding to help other companies affected by closures to a maximum of £1,500.
British Chamber of Commerce director general Adam Marshall said although businesses would welcome the new grant, for many it would not offset the resulting cash crunch.
“With new local restrictions becoming more frequent, a comprehensive package of support will be needed for affected firms. Ministers should increase the amount on offer to ensure businesses and jobs are protected, and extend coverage to more firms that are hard-hit but not forced to close.”
Meanwhile Annie Gascoyne, CBI director of economic policy, said the government needed to be providing more targeted support for all small businesses.
“That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September,” she added.