After mounting pressure on the government to overhaul its emergency loan scheme after thousands of small businesses were denied support, the chancellor, Rishi Sunak, said businesses will be able to apply for “micro-loans” of up to £50,000.
Knowing customers have access to emergency funds is a relief to many, but there may still be a delay as the finer details of the scheme are ironed out. Sending out information related to the loans and answering customers’ FAQs could be a great way to stay in touch and be useful.
The Treasury is preparing to wind down the coronavirus furlough scheme from July, in line with government plans to remove lockdown measures. This may include scaling back the scheme by reducing the wage subsidy from 80% to 60%, and lowering the £2,500 cap on monthly payments.
Small businesses may be looking to banks for financial advice and support as they look at bringing employees back to work and start to feel the full impact from coronavirus. Offering support on your website and providing a portal of information for what SMBs can do next will be a great help.
Research reveals 7 out of 10 small businesses have lost half their revenue since coronavirus, while some are worried about facing a delayed impact later in the year.
Many customers are looking to avoid using government funds until absolutely necessary, so helping with overdrafts and mortgage payment freezes could be the helping hand they need. Make sure they know about these offers through social and email.
HSBC could be forced to put aside £8.8 billion to cover bad debts this year, as it prepares for the fallout from the Covid-19 crisis.
HSBC has warned that fraud could rise during the crisis. Putting extra measures in place to alert customers to potential risks could help save valuable funds later down the line. As people are more online than ever, a video series could be a good start.
The Small Business Administration in the US is prioritising applications from the country’s smallest lenders. Small banks are being given priority to Paycheck Protection Program funds in an effort to avoid big banks and their clients from dominating funds.
What can banks do?
The US government is clearly concerned about excluding smaller lenders from its funding, something that’s worth watching out for in the UK. Stay connected to your customers and what you can offer them by updating them regularly. This doesn’t mean spamming them with emails, but any recent news should be clear on your website.
See what makes small business owners want to stay with their bank, and what help they truly need – sign up now to be the first to receive our small business insights report based on a YouGov survey of 1,000 SMBs:
And if you’d like more good guidance and advice for small business owners during the coronavirus crisis, Earnest has created an online resource that is being updated daily: SME-SOS.com