Bank of England: Funding for Lending SchemeAldermore Bank

About the Funding for Lending Scheme (FLS)

• Launched on 13 July, the scheme will see the Bank of England make low-cost funds available to banks and building societies to make cheaper loans and mortgages available to businesses, as well as individuals

• Lenders will initially be able to borrow the equivalent of 5% of the amount they currently lend, but if they increase their lending, they will be able to borrow more

• No upper limit on the amount financial institutions can borrow, but the first allocation is expected to be worth £80bn, which is 5% of the current stock of lending

• Banks and building societies will be able to borrow, for a fee of 0.25%, over four years. That interest rate is much lower than it currently costs them to borrow on the wholesale markets

About the Funding for Lending Scheme

Aldermore’s CEO statements following launch

• The FLS is a positive development for British business, as it appears to be anchored around net new lending figures by incentivising banks to lend more if they want access to a lower cost of funds

• A number of UK challenger banks are ready and willing to increase lending to businesses, we hope that Government ensures the FLS also works for this group

• The FLS should be a key plank in ensuring a greater flow of lending to small businesses and homeowners right across the country

• Supporting challenger banks not only will it encourage more lending to British businesses, but has the positive effect of more banking competition, something that is desperately needed

Aldermore’s CEO statements following launch

Aldermore’s CFO statement following launch

• Aldermore has assets which are eligible for FLS, and we will be ready to participate in the scheme during this quarter