Treasury launches Funding for Lending scheme

Britain’s banks can start tapping into a new government programme to provide them with cheap funding designed to get more credit to flow through the recession-hit economy, the Treasury said on Wednesday.

The scheme - which offers funding at below-market rates against a broad range of collateral if banks continue or extend lending to businesses and consumers - is likely to ultimately replace earlier credit easing schemes, the ministry said.

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The Funding for Lending (FLS) scheme draw down window is now open for the next eighteen months and banks and building societies can borrow at cheaper rates, for periods of up to four years.

“The more generous FLS has officially opened for business and will in time effectively take over from the NLGS (National Loan Guarantee Scheme), delivering credit easing to the whole economy,” George Osborne, the Chancellor, said in a statement.