RBS Boosts Funding For Small Firms

Fri, 06 Feb 2009

The Royal Bank of Scotland has announced it is to make an additional £3bn available for small and medium sized enterprises (SMEs) this year.

The move by RBS and its NatWest subsidiary includes loans with repayment holidays, and the option to raise cash against assets that businesses own.

Regional funds of £250 million are to be launched across England, Wales and Scotland, with Ulster Bank administering the Northern Ireland scheme.

RBS said the fund will offer customers a choice of financial support including small business loans of up to £15,000 from 7.9 per cent annual percentage rate (APR) and over £15,000 at 5.9 per cent APR. Other options include trading business loans which allow customers to postpone capital repayments .

RBS has come under increasing pressure to increase lending to small and medium-sized businesses hit by a shortage of credit in the economic downturn .

The bank is set to be 70 per cent state-owned after a year of turmoil which could leave it as much as £28bn in the red.

Business Secretary Lord Peter Mandelson welcomed the move and urged other banks to follow suit.
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