Natwest today said it will pledge £5bn of funding to support small and medium-sized businesses across the UK amid disruption caused by the coronavirus outbreak.
The bank, which recently rebranded from RBS, said the cash injection will mark an extension of its existing growth funding package, which is designed to help companies that have been impacted by the virus either directly or through supply chain issues.
The funding will be used to provide loan repayment holidays of up to six months, as well as temporary emergency loans with no fees.
The bank will also grant overdrafts of extensions of existing overdraft limits, as well credit limits of up to £500,000 to support cashflow.
In addition, Natwest said its team of relationship managers across the UK will speak to business customers to offer help and support as they form plans to mitigate the impact of coronavirus.
“The ongoing uncertainty that the UK’s small and medium sized businesses are experiencing is unprecedented even by recent standards,” said Natwest chief executive Alison Rose.
“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.”
Natwest said it was continuing to work with the government, British Business Bank and UK Finance to discuss support for small businesses.
Mike Cherry, national chairman of the Federation of Small Business, said there was “a lot to welcome” in Natwest’s package.
“Ideally, we’ll have banks vying to provide the most comprehensive support for small firms in distress. The proof will of course be in the response that small firms receive if they’re forced to ask a bank for help because of coronavirus-linked disruption,” he said.
Cherry warned that the sector had to avoid the “widespread mistreatment” of small firms in the wake of the 2008 financial crisis. “If the same mistakes are made again, trust in the banking sector could be lost forever,” he added.
Natwest beat expectations to post a £4.2bn profit last year, but issued cautious guidance for 2020 amid low interest rates and upcoming regulatory charges.
Under new chief executive Rose the bank has laid out plans to find £250m in savings this year, while its major rebrand marks efforts to distance the taxpayer-owned lender from the financial crisis.