Unlimited loans and guarantees will be provided to support firms in managing cash flows through this period, with the total funding allocated the equivalent to 15% of UK GDP.
Sunak described the pandemic as “a public health emergency, but also an economic emergency”.
“We have never in peacetime faced an economic fight like this one.
“This struggle will not be overcome by a single package of measures or isolated interventions.
“It will be won through a collective national effort.
“Every one of us doing all we can to protect family, neighbours, friends, jobs.”
In response to the announcement, Oliver Prill, CEO at Tide, stated that he was very pleased to hear that the government had introduced additional support for small businesses as they “bear the brunt” of the coronavirus crisis.
“…The conversations we have had with small businesses in the past few days have told us that maintaining their cash flow is their primary concern.
“Therefore, the announcement of £5m in affordable loans, as well as £10,000 in cash grants … will be very much welcomed by micro and small businesses.”
However, Oliver did raise concerns over cash supply problems and claimed that it was “imperative” that the money was made available through a quick and simple application process.
- Masthaven launches new broker portal offering instant DIPs for bridging
- Sadiq Khan holds emergency meeting to discuss growing coronavirus concerns
- Bridging lender announces risk adjustment in light of coronavirus pandemic
“We have already applied to the British Business Bank to become a provider of the Coronavirus Business Interruption Loan and hope our application will be processed quickly.
“We will also be announcing a number of additional measures to help our members very soon.”
Mark Stephens, CEO at Allica Bank, added: “[The] announcement from the chancellor could not come soon enough for SMEs up and down the country.
“From rates and mortgage holidays to grants and state-backed loans, Mr Sunak has unleashed a broad range of supportive measures.
"As ever, time is of the essence — for many businesses in the worst-hit sectors, it’s going to be about whether they can access the funding quickly enough to ensure their survival.”
Mark also called for the financial services sector to “step up” to make sure it was there to support businesses.
Richard Pike, sales and marketing director at Phoebus Software, commented: “With the government’s £330bn of loans, funding for lenders shouldn’t be an issue, but banks and lenders will surely be glad of the buffers that they have built up over the past few years.
“Be prepared to see arrears figures increase over the coming months as the full economic effect of this issue really kicks in.”
Luke Davis, CEO at IW Capital, had his doubts regarding the government’s funding package, stating that it would only be sufficient in the “immediate interim”.
“The six-month interest rate break offered on these emergency loans is helpful, but after this time SMEs will find themselves swimming in debt.
“Many start-ups and scale-ups will be operating at a loss already, as is the nature of these types of businesses within their formative, foundation years, and many will also have a backlog of historical debt.
“The government perhaps should have offered assistance by way of providing further cash grants rather than loans.”
Luke reiterated the importance of supporting SMEs during this time and added that the entire community of private UK investors would need to “pull together beyond the period of immediate recovery”.