RBS expands size and scope of ‘Capital Connections’ panel for its rejected business clients

rbs_logoThe number of alternative lenders that Royal Bank of Scotland recommends to the small and medium-sized business clients that it has turned down for a loan is to be expanded, the Edinburgh-based lender has said.

Five alternative lenders will join the Capital Connections panel that puts unsuccessful applicants in touch with peer-to-peer lenders, RBS said.

The panel also represents working capital, property secured, social enterprise and charity lenders.

RBS said the firms now brought onto its Capital Connections panel are small business working capital provider iwoca, RBS Social and Community Capital, which specialises in social enterprise and charity lending, and Together, formally Jerrold Holdings Ltd, a property secured lender which noted in most recent accounts is banked by RBS, Lloyds Banking Group, HSBC and Natixis.

The latest additions will extend the offering that originally involved Assetz Capital and Funding Circle and was restricted to businesses generating up to £2 million in annual sales when it was launched last year.

It was also announced that that upper limit has now been extended to £25 million.

Alison Rose, chief executive of commercial and private banking at RBS, said: “RBS is the biggest supporter of British businesses but it won’t always be possible for us to support all our customers with our own capital and it’s important that in these instances we do the right thing by helping them access other finance options.”

Alison Rose
Alison Rose

The panel is being piloted in Scotland, south west England and Wales before rolling out nationally.

RBS said that more partners will join Capital Connections in the coming months.

The bank explained that customers could choose to contact any of the funders directly or be referred to a provider on the panel by their relationship manager.

To ensure maximum transparency and avoid any conflict of interest, no commission will be paid as a result of any referrals.

In the first quarter of this year, RBS’ lending to businesses with revenue below £2m grew by 15 per cent on an annualised basis and was the bank’s fifth consecutive quarter of net lending growth to commercial businesses.

RBS Social & Community Capital is a registered charity that provides funding from £30,000 to £750,000 to social ventures that don’t qualify for mainstream loans.

Megan Peat, chief executive officer at RBS Social & Community Capital, said: “Our mission as a charity is to fund social enterprises that can’t access mainstream finance, which is why we are thrilled to be involved from the start of this ground-breaking initiative. Through this partnership, we will be able to assist many more charities and social enterprises to grow and increase their impact on local communities.”

Andrew Holgate, head of business lending at peer-topeer lending platform Assetz Capital, said: “The collaboration between high-street banks and peer-to-peer lenders means that, together, we can provide the appropriate funding solution to suit many businesses’ financial needs.”

Iwoca has approved hundreds of loans for Scottish business, with an average approval amount of £10,300. Scottish SMEs which have successfully obtained loans from iwoca operate across a wide range of sectors, from local pubs to language academies.

Christoph Rieche, chief executive of iwoca, said: “Our technology can help businesses access much needed credit within hours using a simple online application form, and this will help thousands of small businesses manage their cash flow and take advantage of growth opportunities.”

Laura McMullen, of Funding Circle, said its partnership with RBS had gone from strength to strength in the last year.

She said: “Small businesses are the lifeblood of our economy and by working together, we can help them access the finance they need to grow.”

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