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Law360, London (March 10, 2020, 11:44 AM GMT ) The Lloyds Banking Group and NatWest said they will provide small to mid-sized businesses with working capital to shore up financial losses related to the coronavirus.
Lloyds said Tuesday it will arrange £2 billion ($2.6 billion) financing without arrangement fees for businesses with revenues of up to £25 billion. It said relationship managers already are contacting businesses deemed vulnerable about new overdrafts, increased invoice discounting and possible repayment holidays.
NatWest said a day earlier it will provide small to mid-sized business with £5 billion in working capital support during the coronavirus outbreak, including loan repayment holidays and temporary emergency loans with no fees.
NatWest, a Royal Bank of Scotland subsidiary, announced the support package, which also includes proactive outreach to businesses, on Monday as it said the virus has begun to hit more and more businesses.
Alison Rose, chief executive of NatWest, said the uncertainty small and medium-sized businesses are experiencing is unprecedented.
"NatWest has been closely monitoring the developing situation both in terms of the overall economic impact as well as specific sector and regional impacts to make sure the appropriate support is in place for (small and medium-sized enterprises) customers," she added.
The package includes a £5 billion extension to its Growth Funding Package, which aims to help businesses through tumults such as Brexit and recent floods.
NatWest staff will also provide consultancy and advice to businesses as the coronavirus spreads.
Paul Thwaite, chief executive of NatWest's commercial banking arm, said the bank wants to use its "size and scale" as well as its "detailed customer and sectoral knowledge" to make sure its customers are not hit too hard by the global outbreak.
"The impacts our customers may experience will vary from sector to sector, but we want to be proactive in the way we support them," he added.
The bank also said it will work with the British government and trade body U.K. Finance to understand how the outbreak will affect businesses.
The virus outbreak, a severe acute respiratory syndrome, originated in China and has so far caused five deaths in the U.K.
It has already begun to affect businesses and insurers. Insurance companies were warned by their lawyers and loss adjusters in February to expect a jump in claims under business interruption policies as the contagion takes hold.
The U.K. government said earlier in March that it will declare the coronavirus a "notable disease" so businesses can claim for losses in England from insurance firms.
The virus was also blamed for tipping struggling British airline Flybe into bankruptcy last week as the company said that added pressures on the travel industry from the outbreak weighed on the airline.
--Additional reporting by Martin Croucher and Joanne Faulkner. Editing by Tom Mudd.
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