Early indications suggest the Government’s National
Loan Guarantee Scheme – designed to lower the cost of borrowing – is working
well.
The Government’s £20bn National Loan Guarantee Scheme (NLGS), launched in March this year with the intention of lowering the cost of business loans to SMEs, is delivering promising early signs, according to Barclays.
While banks have been heavily criticised for not lending enough – despite insisting businesses do not want to borrow, even with low rates – early signs suggest the scheme is making an impact, providing access to cheaper finance, and in some cases, cashback to stimulate growth in the economy.
How the scheme works
Barclays, Santander, RBS, Bank of Scotland, Lombard, NatWest and Lloyds TSB have signed up to the scheme, while Aldermore has agreed to join in principle.
The cost of a loan under the scheme should be reduced by the equivalent of a 1% discount on the participating bank’s standard rate of interest.
The amount of money that can be borrowed (both the minimum and maximum amounts) will vary on a bank-by-bank basis. Credit cards and overdraft facilities are excluded from the scheme.
The loan criteria
There are a number of criteria that SMEs must meet in order to qualify for a loan, including a turnover of less than £50m, the majority of business operations located in the UK, and restrictions on the total amount of state aid received. Businesses will need to check that the finance they want fits in the scheme’s criteria, especially since restrictions can apply to businesses already enjoying state aid.’
The normal lending criteria that banks usually stipulate will also apply. SMEs will need to demonstrate the basic core financials, such as viability, the ability to service the loan and capital, good management information, credible management and supplier reliability. Ward Williams would be able to help you present this information in a professional manner.
In addition loans from Barclays under the NLGS are unique in that Barclays is the only bank offering the 1% benefit as upfront cashback for all lending.
For further information/advice on this topic area please contact Ward Williams: www.wardwilliams.co.uk
The Government’s £20bn National Loan Guarantee Scheme (NLGS), launched in March this year with the intention of lowering the cost of business loans to SMEs, is delivering promising early signs, according to Barclays.
While banks have been heavily criticised for not lending enough – despite insisting businesses do not want to borrow, even with low rates – early signs suggest the scheme is making an impact, providing access to cheaper finance, and in some cases, cashback to stimulate growth in the economy.
How the scheme works
Barclays, Santander, RBS, Bank of Scotland, Lombard, NatWest and Lloyds TSB have signed up to the scheme, while Aldermore has agreed to join in principle.
The cost of a loan under the scheme should be reduced by the equivalent of a 1% discount on the participating bank’s standard rate of interest.
The amount of money that can be borrowed (both the minimum and maximum amounts) will vary on a bank-by-bank basis. Credit cards and overdraft facilities are excluded from the scheme.
The loan criteria
There are a number of criteria that SMEs must meet in order to qualify for a loan, including a turnover of less than £50m, the majority of business operations located in the UK, and restrictions on the total amount of state aid received. Businesses will need to check that the finance they want fits in the scheme’s criteria, especially since restrictions can apply to businesses already enjoying state aid.’
The normal lending criteria that banks usually stipulate will also apply. SMEs will need to demonstrate the basic core financials, such as viability, the ability to service the loan and capital, good management information, credible management and supplier reliability. Ward Williams would be able to help you present this information in a professional manner.
In addition loans from Barclays under the NLGS are unique in that Barclays is the only bank offering the 1% benefit as upfront cashback for all lending.
For further information/advice on this topic area please contact Ward Williams: www.wardwilliams.co.uk
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