ROYAL Bank of Scotland is expanding the number of alternative lenders it recommends to small and medium sized enterprises that have unsuccessfully applied for capital funding from the bank.
Five alternative lenders will join a new panel called Capital Connections, representing peer-to-peer, working capital, property secured, social enterprise and charity lenders.
Alison Rose, chief executive of commercial and private banking at RBS, said: “RBS is the biggest supporter of British businesses but it won’t always be possible for us to support all our customers with our own capital and it’s important that in these instances we do the right thing by helping them access other finance options.”
Capital Connections is an extension of an existing scheme at RBS that puts unsuccessful applicants in touch with peer-to-peer lenders Assetz Capital and Funding Circle.
Both these lenders are members of the new panel and are joined by iwoca, which offers working capital financing to small businesses; RBS Social and Community Capital for social enterprise and charity lending; and Together, a property secured lender.
The panel, which is being piloted in Scotland, south west England and Wales before rolling out nationally, will support businesses with a turnover of up to £25 million. The previous incarnation of the initiative was limited to businesses with revenues of no more than £2m.
RBS said that more partners will join Capital Connections in the coming months. The bank explained that customers could choose to contact any of the funders directly or be referred to a provider on the panel by their relationship manager.
To ensure maximum transparency and avoid any conflict of interest, no commission will be paid as a result of any referrals.
In the first quarter of this year, RBS’ lending to businesses with revenue below £2m grew by 15 per cent on an annualised basis and was the bank’s fifth consecutive quarter of net lending growth to commercial businesses.
RBS Social & Community Capital is a registered charity that provides funding from £30,000 to £750,000 to social ventures that don’t qualify for mainstream loans.
Megan Peat, chief executive officer at RBS Social & Community Capital, said: “Our mission as a charity is to fund social enterprises that can’t access mainstream finance, which is why we are thrilled to be involved from the start of this ground-breaking initiative. Through this partnership we will be able to assist many more charities and social enterprises to grow and increase their impact on local communities.”
Andrew Holgate, head of business lending at peer-to-peer lending platform Assetz Capital, said: “The collaboration between high-street banks and peer-to-peer lenders means that, together, we can provide the appropriate funding solution to suit many businesses’ financial needs.”
Iwoca has approved hundreds of loans for Scottish business with an average approval amount of £10,300. Scottish SMEs who have successfully obtained loans from iwoca operate across a wide range of sectors from local pubs to language academies.
Christoph Rieche, chief executive, iwoca, said: "Our technology can help businesses access much needed credit within hours using a simple online application form, and this will help thousands of small businesses manage their cash flow and take advantage of growth opportunities."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here