National Loan Guarantee Scheme (NLGS)



The National Loan Guarantee Scheme (NLGS) was launched on 20 March 2012 and will help businesses access cheaper finance by reducing the cost of bank loans under the scheme by 1 percentage point.

In order to benefit from this scheme, businesses with a turnover of not more than £250 million should apply for loans at a participating bank.

On the 26 June 2012 the Chancellor confirmed that the NLGS will be extended to allow more businesses to benefit from the cheaper finance available through the scheme by increasing the turnover of eligible businesses from £50 million to £250 million. This means that around 99.9% UK businesses could now be eligible to borrow under the scheme. In addition, the Chancellor provided an update on the scheme’s progress, confirming that over 10,000 cheaper loans worth over £1.5bn have been offered to businesses under the NLGS since its launch.

The Government has also increased the flexibility of the Scheme to make raising guaranteed funding more attractive and viable for the banks. For example, it will allow banks to issue guaranteed debt in an alternative, ‘floating rate’ format, meaning a wider range of investors should be attracted to buying NLGS bonds.

http://www.hm-treasury.gov.uk/nlgs