Guarantee Schemes
National Loan Guarantee Scheme
The National Loan Guarantee Scheme (NLGS) was launched on 20 March 2012 to help businesses access cheaper finance by reducing the cost of bank loans under the scheme by 1 percentage point.
The NLGS uses government guarantees on unsecured borrowing by banks, enabling them to borrow at a cheaper rate. Participating banks pass on the entire benefit that they receive from the guarantees across the UK through cheaper loans.
Over 28,000 loans have been offered under the NLGS by the banks who signed up to the scheme at its launch in 2012. These loans had an overall value of over £5.2bn and each offered small business borrowers cheaper loans as a result of the scheme.
On 1 August 2012, the Bank of England and HM Treasury announced the opening of the Funding for Lending Scheme (FLS). The FLS is designed to incentivise banks and building societies to boost their lending to the UK real economy. Current market conditions mean that the FLS is a more favourable option for banks, and banks who have previously offered NLGS loans are now choosing to deliver credit easing to the whole economy through the FLS.
The NLGS is not currently open for new guarantees, but in the event that stressed market conditions re-emerge, HM Treasury would consider whether to reopen the scheme.
For more information about the scheme please contact public.enquiries@hmtreasury.gov.uk
Responsibility of the UK Debt Management Office
The DMO is HM Treasury’s agent in delivering the NLGS. The DMO is not involved in making loans to businesses. Each participating bank will manage loans as part of their business activities. Please contact the participating bank for further information on specific loans.