Governance
RBS loan agreement reached |
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| Written by Gary Howes | |
| Thursday, 02 April 2009 | |
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SMEs to benefit as RBS and Natwest will have risk covered by government.
SMEs to benefit as RBS and Natwest will have risk covered by government.
SMEs will be hoping that credit lines will be freed a little more today after it was revealed that RBS (LON:RBS) and Natwest will have some of their loans to firms guaranteed. Junior business minister Ian Pearson also said discussions were "well advanced" with two other banks. Yesterday Gordon Brown announced that the first £1 billion tranche of the scheme had been agreed. Mr Pearson said: "I am pleased to inform the House that on March 31 the department signed a guarantee agreement with the Royal Bank of Scotland and National Westminster Bank to provide guarantees in respect of portfolios of loans that will enable RBS and NatWest to increase their lending to UK businesses. "The agreement with RBS and NatWest is the first of its kind under the Working Capital Scheme. It represents an important step towards achieving the Government's aim of getting increased credit flowing during these difficult times." Mr Pearson added: "RBS and NatWest have agreed that the capital released by their participation in the scheme will be redeployed in support of lending to credit-worthy small and medium sized enterprises and mid-corporates. "This forms part of the £16 billion of additional lending to businesses they committed to on February 26. This additional lending commitment took effect from March 1.
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