Banks’ corona crisis support to businesses increases to almost 26 billion euros

Since the Corona crisis outbreak in March, the Dutch banks have, in addition to the support package by the government, offered temporary financial relief to 163,000 entrepreneurs. A total of 25.8 billion euros has been made available (an increase from 23.7 billion four weeks ago) through the postponement of repayments and the provision of additional credit to companies. The details are displayed in the factsheet published by the Dutch Banking Association (NVB).

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Over 34,000 businesses have received a larger credit, with a combined value of 22.8 billion euros. Over 6000 loans have been provided with a government guarantee. Altogether, 1.7 billion euros has been made available through the different corona guarantee schemes, such as the Corona SME credit guarantee scheme (BMKB-C), the finance guarantee (GO-C) and the Small Credits for Corona guarantee scheme (KKC). So far, 129,000 companies have received a postponement of loan repayments from their bank: totalling 3 billion euros.

From the start of the crisis in March until the end of the summer, entrepreneurs could request a six-month postponement for loan repayments. This means that the entrepreneurs who applied for a postponement in the start will soon have to start the repayments again. Chris Buijink, President of the NVB: “Banks will let the entrepreneurs pay back the payment arrears in a customer friendly manner. There are two possibilities for this: by extending the remaining repayment term or by giving entrepreneurs the option to make up the remaining amount until the end of the term. Banks will discuss individually with their clients what approach would be taken.

Lending continues to grow gradually, despite the impact of the corona crisis. The total amount of outstanding credit has remained more or less stable during the corona crisis and the numbers are comparable to last year’s numbers. This stable trend is notable for a crisis period. “At the same time, we take into account the possibility that the circumstances will be deteriorating even more,” says, Buijink. “We try to prevent a second lockdown with the new measures that the government has taken to prevent further spreading of the virus.”

If the Dutch economy will be hit hard in a second wave, it is likely that large groups of entrepreneurs will turn to their bank again to request assistance. “In any case, there will be companies that can no longer sustain further support.” Banks are doing what they can, but they cannot save everyone. For a company to receive funding, there must be a perspective of a return to a healthy situation in which the company will be able to repay the loan.” says Buijink.

So far, almost 34,000 consumers received a pause for their mortgage payment or personal loan. In most cases this concerns a payment break of one to three months. This totals a combined value of 81 million euros – an increase from 80 billion compared to four weeks ago. Consumers who want to receive a payment break for mortgage interest relief should report this to their mortgage provider by 31 December 2020.

A payment break on the mortgage or consumer loan is a temporary relief solution with which, for example, loss of income can be absorbed for several months. However, if customers foresee a more structural payment problem, for example due to unemployment, it is wise to (re) enter into a conversation with their bank. Together with the customer, the bank will look for a suitable and more long-term solution which is also tailor made to the specific situation of the customer. The most important principle is that banks want to protect customers against financial burdens which they cannot bear.

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