The economic growth rate of every country has slowed down.
The COVID-19 pandemic has left none of the sector unaffected. With its global community spread, it not only poses a challenge to the health care industry but has also emerged as a matter of serious concern to the financial sector. To stop the community spread of this virus, various governments across the world have declared lockdown. This has adversely affected the industrial sector as the productions as well as dispatch have almost completely shut down.
These lockdowns have a severe impact on small businesses and start-ups. The businesses are experiencing catastrophic effects. With the decreased workforce and market shutdown, many start-ups have come to the brink of shutting down. Fortunately seeing the adverse conditions of the small-scale industries, the federal loan providers have decided to extend a helping hand to them. This would help the companies to be able to stand in the market again and recover their losses.
Measures Taken by The Federal Government and Loan Providers for the Small Scale Industries
In the United States of America, the federal government has recently announced to provide $350 billion to the small-scale industries as forgivable loans to keep the workers employed and providing healthcare benefits to them.
Under this plan, known as the Paycheck Protection Program, Small Business Administration has been provided with forgivable loans for business to cover the eight weeks of payroll, health care benefits, mortgage interests, etc. Not only the United States but central governments and central banks worldwide have introduced various fiscal and monetary stimulus measures to cope up with the global pandemic.
During the recent resolution passed on 15th March, the central banks of Canada, the U.K, the U.S.A, Japan, Switzerland, and the European Central Bank agreed to lower the value of the US dollar to make lending more feasible for the businesses.
The International Monetary Funds has also come up with $50 billion loans for the countries, including $10 billion zero-interest loans for the poorest IMF members to overcome and fight with the effects of Coronavirus. The World Bank as well has issued directives and issued an initial loan of $12 billion to the countries to overcome the effects of COVID-19.
South Korea on March 3rd within its $9.8 billion stimulus package, has given a big priority to the funding of small scale and medium scale industries and job retraining of the people deprived of jobs. The United Kingdom, on the other hand, has lowered its interest rates by 0.5%. It has also decided to grant free leave to the workers of the small-scale industries on the ground of self-isolation. It has also introduced a fiscal plan to cover 80% of the worker’s salaries of the company if the workers are kept on the payroll.
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