Under the Barclays scheme, SMEs who take out a loan will be will receive the full benefit of the NLGS discount immediately in the form of an upfront cashback. This will be calculated as 1 percentage point discount on their loan price over the first 5 years (see examples below).

Steve Cooper, Managing Director at Barclays said: “By giving our customers the full benefit of the NLGS on day one, they receive a lump sum of cash which they can put to use immediately to grow their business. We think this is more useful than drip feeding the value over the lifetime of a loan. SMEs are the lifeblood of our economy and we’re delighted to be part of a scheme that means we can offer this new initiative to our customers. Barclays is open for business, last year we beat our Project Merlin lending commitments to SMEs and I encourage any SME that thinks it would benefit from financing to come and talk to us.”

Mr Greg Munford, CEO of Richardson’s Boating Holidays, which was one of the first companies to receive a loan under the Barclays Cashback Finance Scheme today said, “We will be using this funding to continue to develop and produce next generation Cruisers for our Norfolk Broads fleets. The 1% discount through the Barclays cashback is going to help us even further.”

The NLGS allows Barclays to raise wholesale funds at a cheaper level. Barclays will pass 100% of the benefit on to clients or back to the government – Barclays will in no way benefit financially from the scheme.

Examples
A client with a loan in which they are repaying the interest and the principle:
•3 year loan of £1m, upfront cashback approximately £14,500
•5 year loan of £3m, upfront cashback approximately £72,500

A client with a loan in which the interest is paid but the principle is not:
•3 year loan of £1m, upfront cashback approximately £28,500
•5 year loan of £500,000 upfront cashback approximately £23,000

(source : Barclays)