Royal Bank of Scotland announced last week, that it would use the government’s new flagship lending scheme to offer cheap loans to UK manufacturing companies, in an attempt to stimulate economic growth.
RBS’s manufacturing fund is said to target medium sized businesses with annual sales of between 25 million pounds and 500 million pounds ($770 million) which are seen as a key source of growth for the British economy, Reuters reported.
“Mid-sized manufacturers are key in helping the UK grow and export out of recession. Through Funding for Lending, these are the most competitive terms that we have been able to offer manufacturers for several years,” said Peter Russell, RBS’s head of manufacturing.
Britain launched the ‘funding for lending’ (FLS) plan in June, an initiative to lift the economy out of recession, making 80 billion pounds ($128 billion) of cheap loans available to banks provided they go to households and businesses.
RBS have stated on their website;
‘As part of our ongoing commitment to the manufacturing sector, we are supporting manufacturers by making a £1 billion Manufacturing Fund available to invest in technology, innovation and working capital to fund growth. We can help companies invest through fixed rate loans, available on a 3 or 5 year term, with a capital repayment holiday of two years for each loan option. The fixed interest rates are 3.45% for 3 years and 4.25% for 5 years.’ RBS.
‘The Confederation of British Industry has said that if more manufacturing companies reach their potential it could add between 20 billion pounds and 50 billion pounds to Britain’s annual gross domestic product. Mid-sized businesses represent upwards of 30 percent of the UK’s manufacturing base.’ Reuters