Funding for Lending Scheme will reduce the cost of borrowing

NatWest has set aside £2.5Bn of funds to be provided as loans to customers. That money will be lent with a 1% discount on interest charge and NO ARRANGEMENT FEE.

Any commercial loans to help trading will qualify. That will include asset purchase, buying factories and trading premises. Trade finance, possible buy-outs.

Nat West are also seeking to allow re-drawing of loans, say lending back the last three years repayments, plus terming out hard core OD’s.

I am sure that all the other High Street Banks will have similar schemes so its worth contacting you bank manager to see if the Funding for Lending Scheme can be applied to your loans.

Help for SME’s – National Loan Guarantee Scheme

On the 5th April 2012 the new National Loan Guarantee Scheme will be launched. So what is it and how does it work?

The Government will guarantee £20Bn of banks debt, enabling the banks to access cheaper funding in the money market.
RBS/NWB anticipates £6Bn allocation.Santander has signed up, HSBC have declined.
This has been made possible by  Government reducing the Asset Purchase Facility from £40Bn to £10Bn.
This is a contingent liability for the Government.
There is a two year window, and the banks will pay a fee for the guarantee.

The purpose is that the bank passes on the saving to eligible customers.
The savings are up to 1% off the APC (asset price calculator).

Banks will retain full credit risk of the client facilities.

Eligiblity: SME’s with turnover up to £50m
New loans, hire purchase and leasing including refinance of Over Draft’s and refinance loans. Purchase of owner occupier property is eligible.

Ineligible: loans to property investors, property developers and those that have restrictions in state aid set out in specific European Commission State Aid rules (e.g. agriculture, transport and export).

OD’s, Revolving loans and Invoice Discounting are not eligible.

The borrower must be advised if banks use the scheme on their facility.

Loans up £25k to £250k must be repayable on 3, 5 or 10 year terms.