BARCLAYS is introducing a new cash-back scheme for flexible asset finance to encourage businesses to invest in vehicles, equipment, plant and machinery.
The move has been facilitated by their participation in the ENABLE guarantee programme run by the British Business Bank, the UK-government-owned economic development bank.
The ENABLE Guarantee programme helps banks to increase their lending to smaller businesses by reducing the amount of capital required to be held against such lending.
Barclays will use the capital benefits it derives from its participation in the programme to offer qualifying small and medium-sized enterprises (SMEs) cash-back on eligible asset financing, with the intention of stimulating SME demand for asset finance. This is the first time the capital benefits derived from the guarantee have been used by a high street bank to offer a cash-back facility to business customers.
An initial £300 million has been made available to enable more SME hire purchase and leasing, with companies benefitting from 0.25 per cent cash-back on finance of over £10,000. Businesses with up to 250 employees and a turnover of up to £44m are eligible to apply.
Another advantage is the flexibility of the asset finance borrowing that Barclays offers through its scheme. Both fixed and floating interest rate options are available, with a variety of funding terms possible, allowing businesses to select the product and lease profile that best fits their individual circumstances.
The process will be managed from end-to-end by Barclays’ specialist Asset Finance team, who are able to draw on their asset knowledge and expertise to provide a tailored approach to enquiries and improve speed of execution. The team will also assess existing clients’ eligibility and proactively share scheme information with them, ensuring that all qualifying businesses are able to access the programme and receive cashback.
Karl Nolson, head of global lending group at Barclays Corporate Banking, said: “We want to help SMEs grow more quickly. By collaborating with the British Business Bank we can now offer cash-back to clients, boosting their cash-flow and encouraging them to invest in assets that will drive their business forward.
“Working with our asset finance specialists, the companies we support will be able to spread costs over a term to suit them, at a fixed or flexible interest rate. Rather than worrying about how to fund their growth ambitions, businesses will be able to focus on the important stuff - delivering improved goods and services to their customers in the UK and overseas.”
Patrick Magee, chief commercial officer at British Business Bank, added: “Our recent Small Business Finance Markets report found that asset finance is the most popular form of alternative finance used by smaller businesses, with only bank overdrafts and credit cards being used more frequently.
“Promoting this important type of finance will encourage more business investment in equipment, plant and machinery. This in turn will help UK smaller businesses achieve their growth potential. We are delighted to be working with Barclays so that many more growing businesses will be able to access such finance.”
