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Practical experience of banks during the Corona crisis
17. April 2020
From our daily work we know that the aid and support measures sometimes work better and sometimes worse. As often, practice tends to be more complicated than theory. We therefore wanted to collect practical experiences of banks during the Corona crisis for you.
In addition to our practical experience, we are also interested in the experiences that players in other sectors are currently making in the daily crisis situations. Banks are currently sitting at a crucial interface. After all, in the short and medium term, the crisis is primarily about securing liquidity. At this point we therefore wanted to provide you with the voices of some banks and have sent a short questionnaire to various banks.
Uncertainty in the banks?
But most banks kept a low profile. This indicates an uncertainty and lack of experience in these times, which is also concerning the banks.
Comments on practical experiences of banks during the Corona crisis
The answers of Stadtsparkasse Düsseldorf
Is the current funding programme of the federal and state government helpful in your eyes or not. Why?
For us as a savings bank dedicated to providing loans to small and medium-sized businesses, the programmes are a good basis for providing liquidity to our customers quickly and unbureaucratically.
Unfortunately, currently there is a lack of liability-free loan programmes for young companies under three years of age. However, these companies in particular have not yet had a chance to build up appropriate reserves. In this case, we take the route of the NRW guarantee bank, which rounds off the range of loan programmes well.
How does your company handle credit requests in the current situation?
As Stadtsparkasse Düsseldorf, we are aware of our responsibility in these difficult times and have therefore created an opportunity for rapid financing: On our homepage, companies can easily calculate their liquidity requirements and submit a corresponding application for immediate aid. In order to support the companies in this period quickly, unbureaucratically and as effectively as possible, we are providing an immediate loan in advance until state subsidies from the KfW programme are available.
After we have examined the emergency aid for our customers and granted a corresponding credit line to bridge the gap, we automatically forward the application for the corresponding subsidies to the KfW. This means that the enterprises do not have to submit a separate application again, but can concentrate fully on maintaining their business. You can find further information here.
What are your experiences in the current situation and what suggestions for improvements do you derive from them?
The subsidy programmes of the federal and state governments provide short-term assistance to the companies, but still result in additional liabilities.
These have to be reduced and are a burden on the ability to service debt and the formation of equity. In this respect, the companies would certainly be helped even more if the capital could be made available to the companies in the long term and ideally in the form of equity-like funds, e.g. in the form of a silent partnership. But companies would also be helped by reduced tax rates and social security contributions.