The UK government?s National Loan Guarantee Scheme (NLGS) has been hailed as ?very positive for finance? as two major banks? have utilised the programme to provide discounted asset finance deals.?Barclays Asset Finance has used the NLGS to provide a ?2.6m (?3.3m) finance deal to waste management and recycling company, Roydon Group.
Lombard, the asset finance division of the Royal Bank of Scotland, has also used the scheme to provide a ?250,000 facility to specialist glass manufacturer T4 Design.
Under the NLGS, which was launched by Chancellor George Osborne in March, the government will guarantee ?20bn of bank funding to lend to SMEs with a turnover of less than ?50m.
Participating banks can apply for government guarantees, which will allow them to raise funds at a lower cost, so long as they demonstrate they will pass on the benefits through to businesses by reducing the cost of business loans.
Both Barclays and Lombard have opted to pass on the benefit in upfront cash-back equivalent to the loan discount.
Imperative to invest
Wilf Sumner, director at Roydon Group, which is using the finance to purchase a custom-made waste-sorting machine, said: ?The 1% discount through the Barclays cash-back scheme equates to ?30,000 and is going to help us even further by funding some of the additional electrical works needed for the project.?
T4 Design invested the ?250,000 from Lombard in three specialist glass processing machines and in upgrading in the company?s IT infrastructure to handle the increase in capacity.
The deal, arranged by Charlotte Gabb, senior relationship manager with Lombard, included just over ?3,500 in cash-back.
Gabb said: ?The NLGS is one of the most positive things that has happened in the world of finance in a very long time ? it?makes such a difference to customers to be giving them a positive message.
?Most importantly,?it also helps businesses bring their buying plans forward so that they can invest in their growth.
?In order for a business to be innovative, productive and competitive, it is imperative for it to invest in cutting edge equipment.?
The inclusion of asset finance in the NLGS was welcomed by Stephen Sklaroff, director general of the Finance & Leasing Association, when the scheme was announced.
He said: ?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.?
Contributed by: Leasing Life
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