// HM Treasury will launch Covid Corporate Financing Facility to support business cash flow
// This is separate to the £330bn package of guarantees announced by the Chancellor
HM Treasury and the Bank of England have confirmed they will launch the Covid Corporate Financing Facility (CCFF) to support retailers experiencing disruption in their cash flows due to the coronavirus outbreak.
The CCFF will be introduced from March 23, and is separate to the £330 billion package of government guarantees announced by Chancellor Rishi Sunak on Wednesday.
The facility will be available to retailers whose credit ratings show that they were in robust financial health before the pandemic began to affect businesses.
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The CCFF will provide funding by purchasing commercial paper of up to one-year maturity issued by eligible firms.
Commercial paper is a type of unsecured, short-term debt instrument issued by corporations to meet obligations such as payroll and inventories.
The CCFF will operate for a least the next year, or “as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy”.
Earlier this week, Sunak extended the business rates holiday to all retailers and pledged £330 billion of government-backed loans and guarantees for UK retailers.
Each local authority will adopt and publish its own scheme on business rates relief, and the government will then reimburse the local government.
The Covid-19 outbreak has severely impacted retail, particularly the grocery sector.
In the past week, many supermarkets including Tesco, Waitrose, Iceland and Asda have had to ration products to two or three per person in a bid to control panic-buying and unnecessary hoarding.
Many have also gone as far as to open an hour early in a bid to exclusively serve the elderly and vulnerable or NHS and emergency health workers.