RBS unveils £25 million auto supplier tooling finance fund

The bank, 64% of whose ordinary shares are owned by the UK government, is the first bank to offer bespoke 'Tooling Finance' and is responding to Automotive Council concerns about funding in this area. Estimates say that UK-based car manufacturers currently have tooling requirements the tune of £500 million. With UK vehicle production expected to increase from 1.5 million to 2.2 million units by 2016, the requirement will only likely grow. David Keene, owner of RDM Group, a tier 1 supplier based in Coventry and who sits on the Automotive Council, says: "Tooling Finance is becoming ever more vital in the automotive industry and is essential if we are to grow the UK supply chain. RBS is the first bank to launch this specific funding and has spent a considerable amount of time understanding the needs of the vehicle OEMs and the wider supply chain. RBS Tooling Finance is a 'game changer' for the supply chain and will be of immediate interest to RDM and many other companies like us. I look forward to seeing this initiative improving the capability of the UK supply base with a bank that clearly understands this important sector and its requirements." Alison Rose, chief executive of RBS and NatWest Commercial and Private Banking, adds: "RBS' commitment to support the UK's economic recovery is unequivocal. Through the delivery of this Tooling Finance, we hope to not only safeguard but create jobs, and relieve a stressed supply chain within the UK automotive sector – a key sector for Britain's manufacturing industry." Business Minister Michael Fallon comments: "This new funding for Tooling Finance reflects the growing confidence and increased understanding financial institutions have towards the automotive sector – thanks to our work through the joint government and industry Automotive Council. Coming hard on the heels of a new government scheme I announced this month, there is now almost £50 million available for auto supply chain companies to finance new tooling. "I want this fund to be the catalyst for other banks to increase credit to viable businesses in our vibrant automotive sector as it continues to drive the UK's economic recovery." See also: Auto suppliers get tooling fund support