As part of Santander’s plans to develop its UK SME business, Alliance & Leicester will join the Enterprise Finance Guarantee Scheme from 6 March and Abbey has applied to participate in the European Investment Bank’s (EIB) €15 billion fund, which it has set aside to help SMEs throughout Europe, at an initial level of £100 million.
Loans funded by the participation in the EIB Fund will attract discounted terms over their full life allowing businesses to access competitively priced finance against which they can invest in and develop their own business. Abbey’s application to the EIB loan scheme is subject to the approval of the EIB board, expected in May 2009.
The Enterprise Finance Guarantee Scheme is a Government-led scheme that will provide a 75 per cent guarantee on individual loans made by participating banks to SMEs with a turnover no greater than £25 million.
Both schemes will be implemented through Alliance & Leicester’s 20 regional corporate banking centres and will be available to existing customers of both banks as well as new clients.
Steve Pateman, Managing Director of UK Corporate and Commercial Banking, said: “This is a strong signal from one of the strongest and best capitalised banks in the world that we are open for business and keen to support the SME sector in the UK. In 2008, we increased our lending to SMEs by 30 per cent and, with the financial strength of Santander behind us, attracted over £4 billion of new deposits, confirming that SME customers see us as a safe haven for their money.
“Many businesses are not only encountering challenges in their own business but are also finding their banking facilities being repriced or withdrawn with little consideration to the wider or historic relationship. It makes sense for every SME business to consider its funding requirements over the short to medium-term and who the best provider of that finance or their banking facilities is.”
Following the acquisition of Alliance & Leicester in October 2008, the combined business now has 20 regional corporate banking centres and over 130,000 SME customers. Abbey and Alliance & Leicester are investing further, with plans to open two more regional centres and increase the number of relationship managers by 25 per cent in 2009.
Steve Pateman, added: “We are building a business that has relationship banking at its heart. We are committed to building strong relationships based on an understanding of the business and its needs, providing them with solutions and services that fit those needs. Our expanded regional network gives us the opportunity to develop close relationships with local businesses helping them through some of the challenges they may now face towards longer-term success”
He concluded: “Santander already has a successful corporate and commercial banking model, which focuses on its customer relationships and taking prudent and sensible commercial risks. By adopting this global approach we believe the opportunity exists to really grow our UK SME business significantly in 2009 and beyond.