Asset finance products will be available under the UK
government’s National Loan Guarantee Scheme
(NLGS).
Under the scheme, launched by Chancellor
George Osborne the day before the Budget 2012, the government will
guarantee £20bn of bank funding to lend to SMEs at a lower
cost.
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Participating banks can apply for government
guarantees which will allow them to raise funds at a lower
cost.
Fast-growing UK bank Aldermore has joined four
of the biggest banks on the UK high street – Barclays, Santander,
Lloyds and Royal Bank of Scotland – in signing up to take part.
In order to qualify for the scheme the banks
must demonstrate they will pass on the benefits of the guarantee
through to businesses with a turnover of less than £50m by reducing
the cost of business loans by up to one percentage point.
Participating banks will retain the full
credit risk of the loans they make under the scheme.
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By GlobalDataResponding to the launch of NLGS, Stephen
Sklaroff, director general of asset finance trade body, the Finance
& Leasing Association, said: “We strongly welcome the
Government’s inclusion of hire purchase and leasing in the National
Loan Guarantee Scheme.
“This will help to ensure that the NLGS
supports investment in plant and machinery and leads to new
jobs.
“Around 750,000 small businesses already use
equipment finance of this kind and it is very good news that
businesses taking advantage of the NLGS discount will be able to
choose the most appropriate kind of finance for their needs.”
grant.collinson@vrlfinancialnews.com
