Financial services

National Loan Guarantee Scheme (NLGS)

The National Loan Guarantee Scheme (NLGS) was launched on 20 March 2012 and helps businesses access cheaper finance by reducing the cost of bank loans under the scheme by 1 percentage point. The scheme has been successful, with over £2.5bn in cheaper loans being offered to over 16,000 thousand businesses so far.

The NLGS uses government guarantees on unsecured borrowing by banks, enabling them to borrow at a cheaper rate. Participating banks pass on the entire benefit that they receive from the guarantees to businesses across the UK through cheaper loans.

On 01 August 2012 the Funding for Lending Scheme (FLS) drawdown window was formally opened, which allows banks and building societies to borrow at cheaper rates from the Bank of England for periods of up to four years. Further details can be found in the Funding for Lending Scheme press notice.

It is hoped the FLS will boost consumer and business confidence and drive up demand for finance. The FLS creates strong incentives for banks to increase lending to UK households and businesses and should act as a driver for competition among lenders, which should benefit both consumers and businesses. Some banks may offer specific business loans and mortgages linked to the FLS, whereas others may reduce interest rates or change the terms and conditions on existing products.

Changes in market conditions since the introduction of the NLGS mean that it is now less economical for banks to raise unsecured funding. In practice, this means that banks who are currently offering NLGS loans are likely to opt to deliver credit easing to the whole economy through the FLS. It is expected that banks currently offering loans through the NLGS will, over time, cease to offer NLGS branded products.

Further information on the NLGS is available in the Frequently Asked Questions document.

Participating banks

The banks that signed up to participate in the NLGS are listed below:

Bank of Scotland
Barclays
Lloyds TSB
Lombard
Natwest
RBS
Santander
Ulster Bank

Further information on access to finance

You can visit any of the websites listed below for more information on access to finance, including other schemes that might be appropriate for your business.

National Loan Guarantee Scheme (NLGS)

Participating banks

Further information on access to finance

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National Loan Guarantee Scheme (NLGS)

Funding for Lending Scheme (FLS)