Banks have been told “we must ensure that firms whose business models were viable before this crisis remain viable once it is over”, in a letter from the chancellor, governor of the Bank of England and chief executive of the FCA.
Last week the chancellor announced a number of measures to support businesses including the Business Interruption Loan Scheme, which was available from Monday, offering up to £5m interest-free for 12 months, but there have been reports that banks are requiring extensive personal guarantees.
In their letter to bank chief executives, Rishi Sunak, Andrew Bailey and Chris Woolard said: “The priority for all of us – banks, building societies, government and the financial authorities – should now be to take all action necessary to ensure that the benefits of the measures outlined above are passed through to businesses and consumers.
"This will require a willingness to maintain and extend lending despite the uncertain economic conditions. We must ensure that firms whose business models were viable before this crisis remain viable once it is over.”
They added: “You have an important part to play in the UK response to Covid-19 and we know you will rise to the challenge to support the economy and protect jobs.”