Banks set aside businesses hit
UK BANKS are setting aside billions of pounds to help businesses affected by the coronavirus outbreak.
Lloyds is making £2bn of finance available, with no arrangement fees, to support small businesses with turnovers up to £25m.
While NatWest has pledged £5bn of working capital support for SMEs during the crisis.
Despite a partial bounce-back on the financial markets yesterday, and reports the spread of the virus in China and South Korea could be easing, the industrial fall-out of the global outbreak is still being calculated, with UK cases expected to keep growing.
Meanwhile, the IMF has warned the health crisis will have “significant economic fallout, reflecting shocks to supply and demand different from past crises”.
It said that in China, the drop in manufacturing had been comparable to the start of the global financial crisis – but warned the decline in services appeared even worse.
The Lloyds group said its relationship managers had been in touch with more than 10,000 SMEs to discuss any concerns about the potential impact of a sustained outbreak – particularly through interruptions to supply chain or significant employee absence.
It said its extra financial support would include doing away with some fees and the possibility of payment holidays.
David Oldfield, group director of commercial banking at the group said: “We fully understand how worrying these times are for business owners.
“As our customers face into such uncertainty, we want to provide reassurance to them that, if needed, we are here to help with additional working capital to get them through temporary interruptions to their business and to their cash flow.”
NatWest said its £5bn of funding built on the support it offered to SMEs through the recent flooding and in the run-up to Brexit, which added up to £9.5bn – of which £6.5bn had been committed.
Its new support for SMEs affected by coronavirus includes:
■ £5bn of additional working capital support;
■ Loan repayment holidays;
■ Temporary emergency with no fees;
■ Relationship managers to approach business customers with help and support;
■ Business Growth Enablers sharing information to businesses on coronavirus preparedness;
■ Continued work with the Government, British Business Bank and UK Finance to understand the evolving impacts and appropriately support SMEs; and
■ its NatWest Mentor programme helping with things such as employment law & HR advice, health & safety and environmental management. loans