The Chancellor and Bank of England Governor met with representatives from the banking industry yesterday to discuss helping SMEs affected by coronavirus.
The government is offering a Coronavirus Business Interruption Loan Scheme, which provides lenders with a guarantee of 80% on each loan, extending statutory sick pay, business rates relief, and small business grant funding.
Meanwhile the Bank is offering a four-year funding scheme which should pump £127bn into the economy via cheap business loans.
The banking sector is making over £20bn available for SMEs who need additional finance and support over the coming months.
In attendance was Chancellor Rishi Sunak, Bank of England Governor Mark Carney, his soon-to-be successor Andrew Bailey and Economic Secretary to the Treasury John Glen.
They were joined by UK Finance, representing more than 250 firms from the banking and finance industry, and peer-to-peer lender Funding Circle.
Sunak said: “Today’s summit demonstrates that the government’s response is clearly and closely coordinated with the Bank of England, and that we are working with the banking sector to do everything it takes to support businesses through this difficult time.”
Carney said: “By introducing a four-year funding scheme with incentives for SME lending and by reducing the bank capital requirements, we are providing banks with hundreds of billions of pounds of resources to support UK households and businesses during this challenging period. “We will be monitoring closely how all banks use these enormous resources to help keep firms in business and people in jobs during the months ahead.”
Stephen Jones, chief executive of UK Finance, said: “We urge all businesses to think about how their customers and suppliers could be affected by this global outbreak and to contact their finance providers as early as possible if they think they might have any additional financing requirements.”
