![]() ![]() However, as usual, banks are completely failing in their role to support SMEs by overwhelmingly refusing their loan applications under the government’s Coronavirus Business Interruption Loan Scheme (CBILS). If a company does meet these requirements, they can then issue commercial paper – a short-term debt instrument – which the Bank of England will then purchase with new money it has created just for this purpose.Īs the Bank explained in its press release, one of the main justifications for setting up the CCFF was to “help to preserve the capacity of the banking system to lend to other companies, including small and medium-sized enterprises, which rely on banks.” To access the scheme, companies must be deemed to make a material contribution to the UK economy and have investment-grade rating or a sound long-term rating from a big credit rating agency, making this a highly exclusive facility. As of today, £7.477bn has already been distributed. While SMEs struggle to gain access to government-backed loans, large corporations have already been bailed out to the tune of approximately £7.5bn via the Bank of England’s newly created Covid Corporate Financing Facility – and it’s all being hidden from public view.Īs part of their measures to combat the economic fallout of Covid-19 the Treasury and the Bank of England created a novel scheme called the Covid Corporate Financing Facility (CCFF), to offer financing to large companies whose operations are being impacted by the crisis.
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