Support from UK Banks during COVID-19
Banks have also announced ways in which they will support businesses or individuals affected by the coronavirus outbreak.
Natwest has outlined the initial support it will provide to SMEs across the UK, including committing £5bn to support small businesses with working capital finance. There will also be loan repayment holidays for small business borrowers and the provision of temporary emergency loans with no fees.
RBS, which owns NatWest, said borrowers would be able to defer mortgage and loan repayments by up to three months if they are in financial difficulty as a result of COVID-19. They could also apply for an increased temporary credit card limit and may be able to request an increased debit card cash withdrawal. The bank also said it would waive early closure charges on fixed savings accounts and offer refunds on credit card cash advance fees. These measures will be assessed on a case-by-case basis.
Lloyds Banking Group
Lloyds Banking Group is providing £2bn of arrangement fee free finance to support small businesses up to £25m turnover in size. The finance is available to support ongoing cashflow needs, caused by interruptions to supply chains or due to high staff absences. It is available for 6 months on an ‘as demanded’ basis so will not run out. Priority will be given to those requiring urgent funding:
Barclays stated that it is working with smaller business customers seen as being at-risk, with 12-month capital repayment holidays offered for SMEs with existing loans over £25,000.
HSBC has allocated £5 billion to help businesses in need of support and is proactively contacting its customers to see what help their businesses need. They have also announced a package of support measures for borrowers in financial difficulty as a result of COVID-19, including reduced or deferred mortgage repayments, a temporary increase in credit card and overdraft limits and early access to fixed-rate savings accounts without closure charges. Most recently they hav announced a waiver of their £100 Small Business Loan fee.
Santander said it would look at each customer's situation and explore ways to support them depending on their specific circumstances. The bank's support for customers includes the option to potentially defer or reduce repayments that are due.
The Co-Operative Bank
The Co-operative Bank is providing lending products such as overdrafts, loans or charge cards. It can look at temporary increases or requests to pause or reduce current payment obligations, and will take a flexible approach, based on individual circumstances. There are also offering no arrangement fees for overdraft or loan facilities provided as a result of COVID-19.
Yorkshire Bank is urging its business customers to speak with their relationship manager, share the impacts of COVID-19 and discuss how they can help. The bank will continue to view funding requests favourably provided the underlying business remains sound, and can consider a range of options to help its business customers.
A full list of accredited lenders can be found here:
Trade body UK Finance said banks and other finance providers understand that some customers may be worried about the effect that contracting the coronavirus could have on their finances and asking for help early is key.
The Bank of England has also announced a range of measures designed to support banks and businesses. Measures include a drop in the interest base rate and a funding scheme to assist banks and building societies with their ability to make lending available to customers at an affordable level.