Cheaper finance for mid-sized manufacturers

The bank says this is the first time its manufacturing fund will be targeted specifically at mid-sized businesses. Typically turning over £25m to £500m, these firms are seen as a key source of future growth and represent around one third of the UK's manufacturing base, says RBS. Peter Russell, head of manufacturing at RBS, said: "Mid-sized manufacturers are key in helping the UK grow and export out of recession. Through Funding for Lending, these are the most competitive terms that we have been able to offer manufacturers for several years. We hope it will be a catalyst for investment." The bank is offering UK manufacturers fixed and variable rate loans of between £250,000 and £25 million with interest rates and arrangement fees for each new tranche of lending. Manufacturers can also benefit by deferring any capital repayments for two years. Loans are available over three or five years, with fixed rates of 2.75% and 3.2% respectively. For the first time, and directly linked to the Funding for Lending scheme, manufacturers can also access variable rate loans, with a published interest rate margin of 2% for three years and for longer loans 2.25% plus three month LIBOR. All loan options carry a discounted arrangement fee of 0.5% flat. For manufacturers turning over less than £25 million, RBS and NatWest have an SME Funding for Lending product, with lower interest rates, which was launched last month.