The Ulster Bank on 5th February set up a £250 million Regional Fund to support small and medium sized companies in Northern Ireland through this year.
The locally administered fund is part of a £3 billion SME package the Ulster’s parent company, Royal Bank of Scotland is making available through 12 regional funds across the UK.
The move was announced less than 24 hours after Ulster Bank chairman Sean Dorgan assured the First and Deputy First Ministers the bank was poised to launch a series of initiatives to help hard-pressed businesses in the province.
RBS is largely owned by the government since Prime Minister Gordon Brown sanctioned pumping billions of pounds into the banking group to save it from collapse.
Ever since it has been under increasing pressure to use the money to help troubled companies and stimulate the economy.
As well as providing additional debt finance, the new fund will provide businesses access to other options to help them manage their capital and cashflow in the current economic downturn.
The bank said the fund will offer customers a wide choice of financial support including unsecured small business loans of up to £25,000 at competitive rates and trading business loans which allow customers to postpone capital repayments.
Other options available are enhanced invoice finance and stocking facilities which enable customers to better manage their working capital flows, 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.
For the purposes of the fund, an SME is being classed as any company with a turnover of less than £25 million.
Harry Elvin, head of business banking at Ulster Bank said: “This £250 million fund reinforces our commitment to support the SME community in Northern Ireland and will offer business customers a wide range of additional support.
“It is a major step towards addressing their concerns in such challenging economic conditions.”
He added: “We are working closely with our parent company, RBS and the UK Government on new industry-wide schemes to help viable SMEs address the challenges they are facing”.
First Minister Peter Robinson said: “This announcement comes as a tremendous boost to the confidence of local businesses in Northern Ireland.
“Many businessmen and women have struggled to gain access to finance over the last year and this injection of funding will enable many people to get back to what they do best, running their businesses.”
Deputy First Minister Martin McGuinness added that in their meeting with Mr Dorgan they had been informed about the bank plan to help local business.
“We are confident that local businesses will benefit considerably,” he said.
The Deputy First Minister added: “The Executive will be monitoring all of our major local banks closely to ensure that support is given to SME’s during this difficult time.”
The ministers revealed their talks with Mr Dorgan were the first in a series with local banks and that they will also meet with the Secretary of State for Business, Enterprise & Regulatory Reform, Lord Mandelson.
Wilfred Mitchell, policy chairman of the FSB (Federation of Small Businesses) said the announcement was “a step in the right direction” and urged other banks to follow.
He said: “The FSB welcomes Ulster Bank’s announcement of £250 million additional funding for the SME sector and hopes that it can be quickly translated into new credit lines for our members.
“Given the current economic climate Ulster Bank’s commitment to its business customers is encouraging and sets a standard for other financial institutions to follow.”
He added: “The FSB sees this move as a step in the right direction and hopes other banks will recognise the immense pressure facing the SME sector in the current economic climate and put constructive measures in place to assist them at this difficult time.”
Ian Murphy of Invest NI also hailed the move. He said: “In this challenging economic climate, small and medium sized businesses in Northern Ireland will welcome today’s news that Ulster Bank is making an additional £250 million funding available to viable businesses in the province.
“SMEs are calling out for further support and this move by Ulster Banik should provide them with valuable reassurance.”
*source-belfasttelegraph