Small and medium sized manufacturing businesses will be able to use their assets to borrow cash thanks to a newly created team at RBS and NatWest.

Asset based lending (ABL) is a well established funding mechanism which allows companies to borrow money against its assets including existing stock and equipment.

The newly established team includes 11 specialist finance managers who facilitate deals across the UK – specifically for businesses with a turn over of between £10 million and £25 million.

Although RBS already offers ABL to its larger corporate companies (those turning over £25 million) this is the first time that such a proposition will be available to smaller businesses.

Colin Muir, director of business development for RBS IF said: “In the five years that we have offered ABL, we have lent over £1billion to our larger customers who regularly use the facility to manage cash flow rather than turning to traditional lending products.

“By extending this facility we are hoping to support our SME customers in achieving their ambitions without slowing growth or raising equity.“

The new facility has been rolled out nationally following a pilot in the midlands last year with businesses already benefitting.

Mark Eastwood, head of manufacturing for Commercial Banking, at NatWest and RBS said: “ABL is ideal for manufacturing companies who need to hold large amounts of inventory which can put a strain on cashflow – especially in a period of growth in turnover.

“It is a great way for manufacturers to reach their growth potential and maximise their available working capital and I’m delighted that we can now support smaller manufacturers who make such a significant contribution to the UK – and global – economy.“