Andrew Bailey warned that delays to cash funding could "destroy people's livelihoods".

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He added that the Bank was eager to avoid "scarring" the economy, saying support for struggling companies would speed up recovery and prevent long term damage.

In a press conference Mr Bailey said: "(This) does have to be tackled otherwise we will destroy people's livelihoods and get the scarring that I was just talking about."

He added: "From an operational point of view, I've talked to banks a number of times. I've made it very clear to them.

"They're under no illusions that they've got to get on with this."

What help is there for businesses?

WE round-up the coronavirus help for businesses:

• The government has offered to furlough workers through its Coronavirus Jobs Retention Scheme, paying up to 80 per cent of wages up to £2,500 a month
• Self-employed workers can get up to 80 per cent of profits paid by the government for the next three months – again up to £2,500 a month
• Under the Coronavirus Business Interruption Loan Scheme, small and medium-sized businesses (SMEs) can get loans and overdrafts of up to £5million for up to six years and the government guarantees up to 80 per of these loans
• Small firms can get grants of up to £10,000 to help with ongoing business costs
• VAT payments and self-assessment tax returns can be deferred for three months
• SMEs that cannot afford their tax bills can ask HMRC for a “time to pay” arrangement so any debt collection is suspended
• And they can get up to two weeks’ sick pay – almost £200 per employee for up to 250 staff members – refunded by the government.
• A 12-month business rates holiday has also been introduced for many businesses

Check out out full round-up of coronavirus help schemes. 

Chancellor Rishi Sunak announced the Coronavirus Business Interruption Loan Scheme (CBILS) scheme in March to help small to medium-sized businesses (SME) with an annual turnover of up to £45million.

It provides access to loans, overdrafts, invoice finance and asset finance of up to £5million for up to six years.

The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees.

Businesses can apply directly to their bank, although the British Business Bank website includes further details on the lenders signed up to the scheme and what you need to apply.

So far, more than £1.1billion has been handed out to smaller UK firms, according to UK Finance.

But the banking trade body adds that just two in ten (21 per cent) of those who've applied have been given funding.

Meanwhile a survey of 701 small to medium-size businesses by trade body the British Chambers of Commerce (BCC) found that just 2 per cent had received cash from the scheme.

A Treasury Select Committee meeting earlier this week found that the biggest delays were being experienced by those applying for loans of less than £25,000.

In contrast, the Bank of England has lent £7.6billion to large firms.

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Chief executive of UK Finance, Stephen Jones, told the committee that to speed up the process for CBILS loans, which are still subject to financial stress-tests, the government should consider fully guaranteeing small emergency loans to business.

At the moment, the banks take on 20 per cent of the risk, unlike countries such as Germany, where loans are 100 per cent state-backed.

The Bank of England deputy governor, Sam Woods, was also at the meeting and told the committee that Britain's banks have enough funds to keep lending to the economy even under the deep recession scenario outlined by the Office for Budget Responsibility (OBR).

The fiscal watchdog has warned Covid-19 could lead to Britain's economy shrinking by up to 35 per cent between April and June, with Mr Bailey telling reporters the figure was not "implausible".

Meanwhile, the OBR forecasts unemployment could hit 3.4million leaving around one in ten of the working population without a job.

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