Chancellor , Governor of the Bank of
England Mark Carney, Governor-designate Andrew Bailey and
Economic Secretary to the Treasury met representatives from the
banking industry today to discuss coordinated action to support
SMEs whose finances are affected by Coronavirus.
The Chancellor emphasised the importance of supporting UK SMEs at
this time, and outlined the decisive action taken in yesterday’s
Budget. This includes the new 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.
This is in addition to support being provided by the banking
sector, with industry heads confirming they are collectively
making over £20 billion available for SMEs who need additional
finance and support over the coming months.
The Governor, Mark Carney, and Governor-designate Andrew Bailey
outlined the measures that the Bank of England announced on
Wednesday morning to help UK businesses and households bridge
across the likely economic disruption: a reduction in interest
rates, to support business and consumer confidence; the
introduction of an SME Term Funding Scheme, to support additional
lending to the real economy; and the release of the
counter-cyclical capital buffer, to further support the ability
of banks to supply credit.
The Economic Secretary to the Treasury and Small Business
Minister at the Department for Business, Energy and Industrial
Strategy will also reconvene the Business Finance Council in the
coming days, bringing the financial services industry and
business representative organisations together to ensure
continued action to support businesses during this period.
Taken together, these measures demonstrate a comprehensive and
coherent approach across Government, the Bank of England and
industry to ensure that SMEs get the support they need at this
difficult time.
The Chancellor of the Exchequer, , said:
Yesterday’s Budget outlined our plan to keep our public
services, individuals and businesses financially and
economically secure while we deal with the impacts of
Coronavirus. We are now implementing this plan.
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.
The Governor of the Bank of England, Mark Carney, said:
It’s essential that we work together to help UK businesses
manage through the potentially large but ultimately temporary
disruption caused by Covid-19. Yesterday the Bank of England
announced a comprehensive and timely package of measures to
help do just that.
By cutting Bank Rate by ½ percent, we are lowering the cost of
borrowing for everyone. 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.
Chief Executive of UK Finance, Stephen Jones, said:
SMEs are the foundations of any successful economy and the
banking and finance industry has the commitment and capacity to
support viable businesses as they manage the impact of
Covid-19. Alongside over £20 billion of funding, banks and
finance providers are delivering targeted assistance to firms
including repayment holidays, invoice finance extensions and
fee-free emergency loans. This is in addition to the
government’s welcome announcement of the Coronavirus Business
Interruption Loan Scheme, which the industry will work with the
government to deliver as quickly as possible.
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.
Banks represented at the meeting today were:
- Barclays
- HSBC
- Lloyds
- Natwest
- Santander
- Virgin Money
- Danske Bank
They were joined by UK Finance, representing more than 250 firms
from the banking and finance industry, and peer-to-peer lender
Funding Circle.
