The UK government has announced new funding to support businesses impacted by the coronavirus pandemic.

Businesses in England required to close due to local lockdowns or targeted restrictions will now be able to receive grants worth up to £1,500 every three weeks.

The largest businesses will receive £1,500 per property every three weeks they are required to close, while smaller businesses will receive £1,000.

To be eligible for the grant, a business must have been required to close due to local Covid-19 restrictions, with payments triggered by a national decision to close businesses in a high incidence area. Each new three-week lockdown period will trigger an additional payment.

Steve Barclay, chief secretary to the Treasury, 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.”

Business secretary, Alok Sharma, added: “No business should be punished for doing the right thing, which is why today’s package will offer additional breathing space for businesses that have had to temporarily close to control the virus.

“Through our wider Plan for Jobs, we will continue to back our innovators and job creators across the country who are playing a critical role as we build back better from the pandemic.”

Responding to the announcement, Mike Cherry, national chairman of the Federation of Small Businesses, said: “Though a lot of firms have now been able to reopen, thousands are still impacted by local lockdowns. That’s why this intervention is so critical – throwing a much-needed additional financial lifeline to those most harmed.

“We look forward to working together with local government to make sure there is a straightforward process for all firms affected.”

“New direct cash grants will certainly help small businesses if their area falls under new restrictions to protect public health,” added Annie Gascoyne, director of economic policy at CBI.

“But the impact of Covid-19 is still hurting businesses, so the government will need to look at more targeted support in the autumn. That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September.”