Government Boosts Business Loans with FLS
A new initiative from the Bank of England and the Treasury is underway, boosting lending for businesses for a set period until January 2014.
In July of this year, the Treasury announced a plan to increase lending for households and businesses. The scheme works by setting aside a fund of ┬ú80 billion that banks and building societies will be able to access and borrow from at lower rates.
The Funding for Lending Scheme (FLS), which will be in operation until January 31st 2014, has been developed to improve loan accessibility and rates for families and businesses across the UK.
ΓÇ£I am confident that the FLS will help the supply of credit,ΓÇ¥ the Bank of EnglandΓÇÖs Executive Director for Markets, Paul Fisher, told the BBC in September.
ΓÇ£Before its introduction, it was more likely than not that the stock of credit would contract further over the next 18 months.ΓÇ¥
Take-up of the scheme among commercial banks has not been strong so far, but experts remain confident that top suppliers will soon take advantage to increase their consumer base once the complicated process of signing up has been resolved.
Among those already committed to the FLS is the Royal Bank of Scotland, whose CEO of Corporate Banking, Chris Sullivan, has stated he hopes the scheme ΓÇ£gives more businesses the confidence they need to invest.ΓÇ¥
It is hoped a successful outcome will offset the continued fall in the rate of lending and the rising cost of loans and help boost future outlook for the market.
More information on the Funding for Lending Scheme is available through the Bank of England website.