BoE Announces Updates to TFSME to Support Lending for SMEs
BoE announced further measures to ensure the Term Funding Scheme with additional incentives for Small and Medium-size Enterprises (TFSME) can continue to support lending to SMEs through the Bounce Back Loan Scheme (BBLS). In addition to the change announced in May, whereby banks will be able to extend the term of some TFSME funding from four to six years, BoE will allow TFSME participants to extend a part of their borrowings again, to a total term of up to ten years.
Participants will be able to extend the term of TFSME loans by up to a further four years at the point at which the existing six-year TFSME loans mature. The amount of TFSME funding that can be extended will be capped at the amount of BBLS lending on TFSME participants’ balance sheets at that point. TFSME documentation will be updated in due course to reflect this change and to provide further operational details. The TFSME was launched in March 2020 as part of the measures to respond to the economic shock from COVID-19. In May 2020, BoE announced that TFSME participants would be able to extend the term of some of their TFSME funding to align with the term of loans made through BBLS, which was set up to enable businesses to access finance more quickly during the COVID-19 outbreak.
Related Link: Notification
Keywords: Europe, UK, Banking, COVID-19, SME, BBLS, Term Funding Scheme, Credit Risk, Loan Guarantee, BoE
Featured Experts

Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
APRA Updates Validation and Derivation Rules in September 2020Related Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.