Hard-pressed businesses who are finding it hard to get their hands on much-needed capital have been given a boost by the Bank of England, who have launched a new initiative designed to make access to below-market interest rate loans much easier. The Funding for Lending scheme (FLS) allows businesses and homeowners to take out loans without having to repay too much in interest, and was designed to boost lending to businesses. The Bank of England has made this initiative happen by lending money to financial institutions, who then lend that money to their customers.
To make sure that everything goes according to plan, the Bank will monitor how the money is being used by banks and building societies. At a time when businesses large and small are finding getting a loan because of the reluctance of many banks to give them money, no matter how secure their finances are, the new scheme could act as a lifeline, especially at a time when lending to non-financial firms is in decline. The RBS Group, which owns the Royal Bank of Scotland and NatWest, is among the first banking groups to take advantage of the scheme.
Many banking institutions have welcomed the FLS with open arms, especially because of the fact that it could help reduce the cost of borrowing, which is often prohibitive for small businesses and homeowners struggling to get onto the property ladder for the first time. Small and medium-sized businesses that rely on business loans from banks to keep going when times are tough find paying for overheads such as stock, raw materials and even energy can be difficult.
Struggling companies find that they cannot afford to spend too much on energy, which is one of the biggest costs that they face. This means that any money saved is extremely valuable, as they’re given more breathing space. To make sure that they can get a better deal if they’re refused a loan, they often ask experts such as Make It Cheaper energy saving advice on how to pay less, which may involve switching energy supplier. A spokesperson explains why switching is useful if paying too much for energy:
“Research we conducted amongst our customers showed that they benefitted from switching, especially to small suppliers. They found that by doing so, they wouldn’t experience the billing problems or poor customer service they had with their previous energy supplier, which resulted in lower energy bills. Make It Cheaper was set up to assist businesses large and small who wanted better energy deals and improved customer service, and our happy customers show that we’re doing well in that respect.”
Business Secretary Vince Cable will be holding a Q&A session on issues affecting small businesses at an event held by Make it cheaper in Twickenham. The two hour event, which takes place on Tuesday 6th September from 6pm-8pm, also features savings surgeries and networking opportunities. The venue is at The Albany, 1 Queens Road, Strawberry Hill, Twickenham TW1 4EZ, and entry is free.
For more information regarding the Make It Cheaper Twickenham event click here