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Santander is one of the first big banks to announce its plans following the Government’s Funding for Lending scheme. However, it remains to be seen whether this initiative will be as effective the service already provided by the specialist invoice factoring and finance companies.
Santander UK, part of the Banco Santander, S.A (SAN) has announced its participation in the Government’s Funding for Lending Scheme. To support this, it is launching a range of new funding initiatives aimed at providing additional support to UK small and medium sized businesses.
Santander is eligible for £9.4 billion from the scheme and accessed the first £1 billion in July this year.
The funding has allowed Santander to reduce rates across its range of business banking products. However, as price is not the only problem small businesses have faced in accessing finance, it has also looked at other ways in can help ease cash flow problems for businesses and thus allow them to invest and grow.
Following the Government’s review into the benefits of Supply Chain Finance, Santander announced it is rolling out a supply chain finance initiative, including invoice factoring. This form of finance has the potential to free-up billions of pounds of working capital for smaller suppliers.
Santander is also increasing by £500 million the amount available to businesses through asset finance. The aim is to help free-up working capital for companies looking to invest in their businesses with the purchase of new equipment such as plant and machinery, vehicles or construction equipment.