17 March 2020 – Additional financial support announced to help businesses

Type of Intervention: Financial and Economic
Sectors Involved: Finance/Economy, Private Sector and Businesses
Intervention Categories: Finance policy and financial aid; Stimulus packages and financial support
Level of Jurisdiction: National
Lead People/Agency: HM Treasury

Overview: Chancellor Rishi Sunak announces a package of government-backed and guaranteed loans to support businesses through the crisis. He makes an initial £330 billion of guarantees – equivalent to 15% of UK GDP. “If demand is greater than the initial £330 billion I’m making available today, I will go further and provide as much capacity as required.”

Support will be delivered through two main schemes:
For larger firms, a new lending facility, agreed with the Bank of England, to provide low cost, easily accessible commercial loans; for SMEs, an extension of the new Business Interruption Loan (announced the week before on 12 March) to now provide loans of up to £5 million. Also cuts in rates for businesses, and mortgage payment holidays for those struggling financially.
Full details here: https://www.gov.uk/government/speeches/chancellor-of-the-exchequer-rishi-sunak-on-covid19-response

Other links: 1 2 3 4
Type of Justification: Advice of INTERNAL government advisory committee or group
Source of Evidence or Justification: National – government
Evidence/Justification: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873217/5E70FECD.pdf

Letter from Bank of England: “Over the past week, we have agreed that we need to go further. Although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months. Temporary, but significant, disruptions to supply chains and weaker activity will challenge cash flows and increase demand for credit from companies.”