UTB seals deal to boost SME lending

For the first time the government-owned British Business Bank has used its ENABLE Guarantee specifically for the housebuilding sector in a deal which will boost lending to smaller UK housebuilders.

United Trust Bank (UTB) has secured the ENABLE Guarantee which will allow the bank to significantly increase the amount of development finance it provides to UK SME housebuilders. The banks says the transaction is expected to enable UTB and the British Business Bank to support the building of new housing with a value of more than £500 million over the lifetime of the guarantee

The British Business Bank’s ENABLE Guarantee programme encourages banks to increase their lending to SMEs by reducing the amount of capital required to be held against such lending. Under an ENABLE Guarantee, the UK government takes on a portion of the counterparty’s risk on a portfolio of loans to smaller businesses in return for a fee. In this instance UTB will allocate this additional capital to increase its funding to new build and redevelopment projects undertaken by SME housebuilders and developers.

UTB’s executive director, Noel Meredith, and chief financial officer, Jonathan Ayres, worked with the British Business Bank to structure the ENABLE Guarantee for development finance.

Graham Davin, ceo …