RBS in, Lloyds undecided as lending scheme extended to invoice finance
24 April 2013
The expansion of the government’s Funding for Lending Scheme to include additional types of lending and lenders is potentially good news for the staffing industry, opening up the possibility of access to both cheaper and more plentiful borrowing.
Wed, 24 Apr 2013
The expansion of the government’s Funding for Lending Scheme to include additional types of lending and lenders is potentially good news for the staffing industry, opening up the possibility of access to both cheaper and more plentiful borrowing.
The Bank of England announced today that the scheme, under which banks can borrow money on condition that they pass it on to customers and due to end in next January, will be extended for another year.
In an effort to boost lending immediately, through the scheme banks will be able to borrow £10 at cheaper-than-market rates for every £1 they lend this year. For every £1 of lending to small and medium-sized enterprises (SMEs) in 2014, banks will be able to draw £5 from the scheme.
The revamping of the scheme comes after criticisms that the current scheme had failed to boost lending to SMEs.
The scheme is just one of a number of initiatives by the government to encourage banks to lend.
A spokesperson for The Royal Bank of Scotland (RBS), a major provider of invoice finance to the staffing industry, says the group will participate in the revised scheme through RBS Invoice Finance and Lombard. “We welcome the fact that the scheme is being widened to include other types of finance, including asset-based finance and invoice finance,” the spokesperson tells Recruiter.
Stuart Talbot, head of the Recruitment Finance Division for Lloyds TSB Commercial Finance, tells Recruiter that “Lloyds is considering how to be party to the revised scheme and will make an announcement shortly”.
He adds that the current Funding for Lending Scheme has already had an effect in slightly reducing the cost of borrowing in the market.
Sue Dodd, director of recruitment industry intelligence firm Agile Intelligence, says expansion of the scheme “seems likely to be positive” for the staffing industry, which is a big user of invoice discount finance, giving it access to cheaper funding, as well as potentially more lending. However, she adds: “It depends whether the lenders pass it [the benefit of being able to access cheap money] on to staffing companies.”
Don Leslie, who leads the management consultancy practice of niche recruiter Beament Leslie Thomas, tells Recruiter: “Anything that helps business through these difficult times has to be applauded.”
However, he cautions: “This is not the first such initiative, and so far there doesn’t seem to have been much benefit. There has been a lot of talk and very little outcome.”
The expansion of the government’s Funding for Lending Scheme to include additional types of lending and lenders is potentially good news for the staffing industry, opening up the possibility of access to both cheaper and more plentiful borrowing.
The Bank of England announced today that the scheme, under which banks can borrow money on condition that they pass it on to customers and due to end in next January, will be extended for another year.
In an effort to boost lending immediately, through the scheme banks will be able to borrow £10 at cheaper-than-market rates for every £1 they lend this year. For every £1 of lending to small and medium-sized enterprises (SMEs) in 2014, banks will be able to draw £5 from the scheme.
The revamping of the scheme comes after criticisms that the current scheme had failed to boost lending to SMEs.
The scheme is just one of a number of initiatives by the government to encourage banks to lend.
A spokesperson for The Royal Bank of Scotland (RBS), a major provider of invoice finance to the staffing industry, says the group will participate in the revised scheme through RBS Invoice Finance and Lombard. “We welcome the fact that the scheme is being widened to include other types of finance, including asset-based finance and invoice finance,” the spokesperson tells Recruiter.
Stuart Talbot, head of the Recruitment Finance Division for Lloyds TSB Commercial Finance, tells Recruiter that “Lloyds is considering how to be party to the revised scheme and will make an announcement shortly”.
He adds that the current Funding for Lending Scheme has already had an effect in slightly reducing the cost of borrowing in the market.
Sue Dodd, director of recruitment industry intelligence firm Agile Intelligence, says expansion of the scheme “seems likely to be positive” for the staffing industry, which is a big user of invoice discount finance, giving it access to cheaper funding, as well as potentially more lending. However, she adds: “It depends whether the lenders pass it [the benefit of being able to access cheap money] on to staffing companies.”
Don Leslie, who leads the management consultancy practice of niche recruiter Beament Leslie Thomas, tells Recruiter: “Anything that helps business through these difficult times has to be applauded.”
However, he cautions: “This is not the first such initiative, and so far there doesn’t seem to have been much benefit. There has been a lot of talk and very little outcome.”
