Private lenders are making funds available to small businesses impacted by COVID-19, including £2 billion from Lloyds Banking Group and £5 billion from NatWest.
Lloyds Banking Group has announced that it has allocated up to £2 billion to ensure the UK’s small and medium-sized enterprises (SMEs) have access to additional finance to overcome any impact to cash flow in relation to coronavirus.
It is anticipated that a sustained and wide-scale outbreak in the UK will impact businesses and in particular their cash flows, as interruptions to their supply chain or significant employee absence will severely impact their ability to generate sales and result in reduced revenues.
The bank’s Relationship Managers speak to nearly 5,000 small businesses each week and have already reached out to more than 10,000 SMEs to discuss any concerns they already have on the potential impact a sustained COVID-19 outbreak may have on their business.
This additional finance, which has now been confirmed for small business customers with up to £25 million turnover, will include the removal of certain fees and the possibility of payment holidays for the worst affected.
David Oldfield, group director, commercial banking, Lloyds Banking Group, said:
‘As our customers face … 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.’
As the impact of the coronavirus outbreak begins to directly impact more businesses, NatWest has also outlined the support it will provide to SMEs across the UK, including a £5 billion Working Capital Support extension to its Growth Funding Package, ongoing support and practical advice for businesses.
NatWest is committed to helping SMEs thrive and achieve their potential in all economic climates. This new funding builds on the targeted support the bank offered to SMEs through flooding and Brexit readiness as they adapt to the rapidly evolving impacts of the coronavirus on the UK economy.
The package will help SMEs across all sectors and where there is the greatest disruption and need. The support includes the following components:
- An additional £5 billion for working capital support that meets the needs of SMEs.
- Loan repayment holidays.
- Temporary emergency loans with no fees.
- The Bank’s Relationship Managers based in communities across the UK will proactively speak to business customers offering help and support as they form their plans to mitigate the impact of coronavirus.
- Continued work with the Government, British Business Bank and UK Finance to understand the evolving impacts and appropriately support SMEs.
Alison Rose, CEO of NatWest, commented:
‘The ongoing uncertainty that the UK’s small and medium-sized businesses are experiencing is unprecedented even by recent standards.
‘While many of our customers are yet to feel the direct impacts of coronavirus, I want NatWest to have the right support in place, so we are there to help our SME customers when they need us most.’