RBS floats £1bn fund for manufacturers

The Royal Bank of Scotland (RBS) has introduced a £1bn fund to provide loans to British manufacturer

The bank will provide funding ranging from £250,000 to £25 million on flexible terms and discounted rates as a way to boost manufacturing activity in the UK.

Under this first-of-its-kind, dedicated fund, the debtors will be given the option to defer capital repayments. Instead, they can choose to pay only the interest for up to three years.

The loans will be provided to manufacturers looking to finance their investments and retain their market competitiveness. The funding will be available to RBS' existing and new customers.

RBS officials said the move is designed to assist the manufacturing sector which is expecting a growing demand for its products in 2010 as the economy slowly begins to emerge out of the downturn that has been one of the worst ever.

The launch of the fund is being seen by the industry as a welcome return of confidence in manufacturing activity.