The Regional Growth Fund (RGF), a Government initiative running from 2011 to 2015, supports eligible projects and programmes that are also raising private sector investment to create economic growth and sustainable employment.
The £50m is the fourth tranche of funding awarded to RBS by the RGF, and will be followed by further money awarded to the bank in the RGF’s fifth round of funding. It will allow RBS to continue supporting the areas and communities across England, currently dependent on the public sector, to make the transition to sustainable private sector-led growth.
These awards highlight RBS’s support for this Government initiative and the bank’s desire to find solutions for customers whose current circumstances do not meet the normal lending criteria.
Safeguarding and creating jobs
Over the five RGF funding rounds, RBS expects to help up to 3,000 SMEs with more than £1 billion in incremental investment. Round 1 funding proved to be so successful that estimates indicate that the proposition safeguarded more than 9,000 jobs and is in the process of creating more than 2,500 new jobs.
Skelmersdale-based Principal Packaging, a provider of top quality, custom packaging for the food industry, is more than doubling its workforce, thanks to two grants received under RGF Round 3.
A family run business, Principal Packaging was awarded a first grant of £150k, supported by NatWest lending of £525k. This enabled Principal Packaging to purchase their trading premises when, with their lease expiring, their landlord decided to sell.
Not only did this help to safeguard the company's existing workforce, by also buying the adjoining warehouse space as part of the production expansion, Principal Packaging was able to increase their staff numbers by four.
To further boost their growth trajectory, Principal Packaging received a further grant award of £45k, supported by £450k of asset finance from Lombard, to purchase a multipoint folder gluer machine. This helps the company provide more of their services in-house and will result in the recruitment of a further three members of staff.
Richard Sharratt, Director of Principal Packaging, said: “Without access to the Regional Growth Fund we wouldn't have been able to invest in the new premises and technology. It’s been a business changing decision which has increased our turnover significantly and led to us taking on seven new employees."
Supporting the economic recovery
Having already distributed £70m of RGF Round 1 funding to SMEs, RBS is now distributing a further £25m of Round 3 funding and is soon to open its £50m Round 4 tranche. This will be available to English SMEs, outside of London, with capital investment intentions that will safeguard or create jobs but who lack sufficient cash deposit to obtain conventional financing.
With a provisional Round 5 award also secured, it is estimated that RBS's total support under the Regional Growth Fund will result in incremental investment of more than £1bn by SMEs across England.
Alison Rose, Chief Executive of RBS and NatWest Commercial and Private Banking, said: “RBS’ commitment to the Regional Growth Fund is unequivocal. Through the delivery of this fund we have helped to not only safeguard but create jobs, and have demonstrated our determination to play our part in supporting the economic recovery.”