This further commitment to the SME sector will be delivered through twelve Regional SME Funds in England, Wales and Scotland. Ulster Bank will provide the Fund for Northern Ireland's businesses. The Funds will provide a comprehensive package of funding choices for SME's in each region right across the UK.
This is part of the commitment made by the Bank last month to increase lending to UK borrowers by an additional £6bn. In addition to providing traditional debt finance, the new Funds will offer businesses the opportunity to access other avenues available to help them manage their capital and cashflow through the current economic downturn.
With immediate effect, NatWest and RBS have committed to make an additional £250m funding available to SMEs in each RDA region in England, Wales, Scotland and Northern Ireland. The new locally administered funds will offer customers a wide range of financial support including flexible business loans which allow customers to postpone capital repayments, invoice finance products which may guarantee debtor payment, effective ways to release cash through using the assets already owned by the business and short term trade finance essential to keep imports and exports flowing.
Accessed via customers' existing dedicated Business Relationship Managers, these funds will also offer SME customers lower priced loans from the £250m funding the Bank has recently secured from the European Investment Bank.
Announcing the new package, Alan Dickinson, Chief Executive of RBS UK, said: "The launch of the new SME Funds reinforces our commitment to support our 1.2 million SME businesses locally across all areas of the United Kingdom. Our lending to business and commercial customers rose by 10% in 2008 and these Funds are part of the commitment made by the Bank last month to increase lending to UK borrowers by an additional £6bn. The Funds have been designed to give business customers the further confidence to focus on running their business rather than having to worry about their finances. In addition to providing new support initiatives, we will be working even closer with Regional Development Agencies as part of our ongoing commitment to help SMEs trade through the current economic downturn."
Welcoming the announcement, Business Secretary, Lord Mandelson, said: "This new fund is good news for smaller businesses across the country. More funding must be made available at branch level to enable viable companies to access the finance they need to weather these difficult financial conditions.
"I would like to see other lenders taking similar steps to ensure their frontline managers have access to funds dedicated to helping UK SMEs."
