Small firms get cheaper RBS loans

Royal Bank of Scotland is cutting rates and improving borrowing terms for small businesses on the back of the Bank of England’s £80 billion scheme to jump-start bank lending.

RBS, 82 per cent owned by the taxpayer, said yesterday it was using the recently launched “Funding for Lending” scheme to cut rates by 1 per cent on average for £2.5 billion of new loans, while the smallest businesses will see borrowing costs cut by 1.6 per cent.

The move follows last week’s announcement by RBS that it was cutting mortgage rates for first-time buyers as a result of the scheme.

The BoE and Treasury launched the initiative to offer banks finance on the condition they pass it on to households and businesses in the form of cheaper loans.

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