ROYAL Bank of Scotland and NatWest are to make an extra £250m of lending available to small firms in Merseyside and the North West from today.

The cash is part of a £3bn lending pot set aside by the bank to ease the credit crunch for companies across the UK. Regional managing directors have been briefed to “fully utilise” the funds during 2009.

This latest announcement follows on from a recent RBS/NatWest commitment to guarantee overdrafts and pricing for small business customers until at least the end of 2009.

One business leader in Liverpool said it was not a huge amount of money, but demonstrated that taxpayers’ cash put into the banking system was at last starting to trickle down to small firms.

In a statement, RBS/NatWest said: “This further commitment to the SME sector in the North West will be delivered through a comprehensive package of funding choices.

“In addition to providing traditional debt finance, the new funds will offer businesses the opportunity to access other avenues available to help them manage their capital and cashflow through the current economic downturn.”

The new locally administered fund will offer customers a range of products including flexible business loans which allow customers to postpone capital repayments, invoice finance products which may guarantee debtor payment, effective ways to release cash through using the assets already owned by the business and short term trade finance essential to keep imports and exports flowing.

Liverpool Chamber of Commerce chief executive Jack Stopforth welcomed the announcement and called on other banks to do everything they could to help small firms through the recession.

He told LDP Business: “£250m sounds a lot of money, but I suppose in the grand scheme of things it is not a huge amount.

“But the principle of this move is good because it shows that public money that has been given to the banks is now starting to work its way through the system.

“What we are finding through our members is that many of them are reluctant at the moment to actually approach the banks because they believe they will be turned down or see an increase in their charges.

“I think the onus is now on the banks to demonstrate that they are open and offering reasonable terms.”

Accessed via customers’ existing dedicated business relationship managers, the fund will also offer small firms lower priced loans from the £250m funding the Bank has recently secured from the European Investment Bank.

Source: http://www.ldpbusiness.co.uk