Companies have to adjust to new rules imposed by the COVID-19 pandemic. Thus, central banks and governments are desperately searching for new stimulus measures to prop up ailing businesses. Experts point out the common trend among influential central banks. They aim to soften conditions for crediting large, small, and mid-sized enterprises.
Analysts expect lending institutions in the eurozone to deal with buoyant demand for bailout loans. They foresee a peak in loan applications in Q2, 2020. If this scenario comes true, banks will be able to meet the demand through relaxing their requirements for business loans. The ECB assures lending institutions that they will be backed by the authorities which in turn are taking measures to pump up liquidity.
In Q1 this year, companies had to comply with strict requirements from banks to file for a business loan. In the face of the coronavirus pandemic, global central banks revised their fiscal policies. The ECB softened credit conditions for all companies.
In Q2, 2020, lending institutions can rely on additional liquidity operations by the European regulator as well as government stimulus packages. Experts believe that banks will ease notably loan requirements for businesses starting from May – June.
Under such conditions, a lot of companies will urgently need a loan to survive the coronavirus fallout. Having a solid cushion from state authorities, banks will be able to cope with such demand.