A boost for Clients with the ‘Funding for Lending Scheme’
We still talk about the credit crunch and there are plenty still commenting about the banks and how difficult it can be to get funding for projects. We have begun to notice though over the last 3 months that quite a few of our clients have taken advantage of the Funding for Lending Scheme (FLS) and this is helping businesses and driving new projects with expanding capacity in new buildings whether extending existing; new build or relocations.
The FLS works by making cheaper loans available through the main banks and having a large ‘pot’ of this cash available for distribution to the market.
The £80bn FLS was launched in June 2012 as a replacement for the short-lived National Loan Guarantee Scheme (NLGS) in a bid to increase the volume of loans to homes and businesses. Participating banks can access funds at below market rates subject to them expanding their own lending levels.
Clearly the schemes introduction has not been an instant cure from figures for the first two months of the FLS published by the Bank of England showed that net lending decreased by more than £1bn across the six banks that drew funds from the scheme during the period.
The FLS is aimed at helping credit-starved small companies, and to be a taxpayer-funded scheme to get through to the companies that need it.
At Harris Lamb we certainly have a few clients who have taken advantage of the scheme one of which has been the catalyst for a new 10,000 sq. ft. factory expansion.
One of the issues with the scheme seems to be that not many people know about it and when we have mentioned the scheme to some clients it is obvious that the scheme’s availability has probably not been publicised as well as it could have been – ask your Accountant about it!