A business support company is facing a £250,000 bill from the government which is likely to force it to close.

BSK-CiC, which offers discounted coaching and other services to small businesses, was left with the hefty charge in what its chief executive called a “different interpretation of historic European funding requirements”.

The Chatham-based company, which puts on high-profile business exhibitions like Kent 2020 Vision Live taking place next month, which is still due to take place, faces an immediate demand to pay back money it received in 2012 for projects it ran to encourage businesses to cut their energy bills.

The award of the money has since been disallowed by the Department of Communities and Local Government under European rules, which allow them to claim back cash given out retrospectively.

It prompted BSK bosses to send an urgent email to its network of business coaches this week asking them to stop carrying out work for the company in case it is unable to pay.

Although its board had agreed a deal to pay the cash back from 2017, the government said last month it will demand payment in full if poor trading forces BSK to close, which has become “a possibility” according to its chairman because of the threat of the government’s huge bill.

The firm was already under financial pressure after the loss of a number of government contracts – particularly the Growth Accelerator programme – and losses on the euro exchange.

It forced the company, based in Chatham’s Medway Innovation Centre, to launch a strategic review of its books with independent advisors. The last month has seen 12 of its 19 staff leave the business.

Chief executive Alex Ledger said in an email to staff: “We are faced with having to repay a significant sum relating to a grant received, delivered and expended some years ago.

“To ensure coaches do not deliver coaching and/or training services for which the company may be unable to pay, please immediately suspend all coaching and training programmes connected with the company until further notice.

“I appreciate this will be unsettling news and I can only assure you that you will be notified as soon as the review has been finalised which is anticipated to be prior to the end of April.”

BSK, which stands for Business Support Kent, is a community interest company which has raised nearly £100 million of European and UK funding to support more than 10,000 people start up and grow their business over 20 years.

In the last three years it has raised more than £20m and created about 500 new jobs.

Chairman Robert Clewley said: “It is with sincere regret that after 20 years we have reached this situation and the uncertainty that has resulted from these events.

“I would like to thank our bank and independent advisors for the support and guidance that they continue to provide. I would also like to thank every person who has worked with BSK to make a positive impact on the business community in Kent.”

The Department of Communities and Local Government was unable to comment.

The next Kent 2020 Vision Live, which takes place at Kent Showground, Detling, on Wednesday, May 13, is unaffected by the developments.

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