Funding for franchisees

A new fund worth £100 million has been created by NatWest and RBS to support people who want to start their own franchise business

With the public sector facing serious cuts, opportunities in the UK's franchise sector look set to play a significant role in sustaining economic activity. Peter Ibbetson, chairman of small business for NatWest and RBS, says: "Everybody wants to see banks funding business growth, as well as helping new businesses get off the ground creating jobs - this is exactly what this fund will deliver. The industry has shown itself to be resilient during the recession, so for people wanting to start their own business, franchising is a great way to do so."

There are currently around 35,000 franchisees in the UK and nine out of 10 of them are profitable. As one of the UK's number one banks for franchising, NatWest is looking to boost that number with its new fund and make it easier for people to get the start-up finance they need.

An early boost
The £100 million NatWest franchise fund celebrates the bank's 30 years of commitment to the UK franchise sector. The fund, which is endorsed by the British Franchise Association (bfa), has been set up to allow potential franchisees to apply for funding of up to 70 per cent of the total value of their franchise investment. This, along with a reduced rate arrangement fee of one per cent for the first year, aims to make it possible for more people to realise the dream of growing their own franchise business.

The package also includes the option of a 12-month capital repayment holiday to help with cash flow and 20 per cent off RiskRemedy, the compliance service offering guidance on Employment Law and HR, and Health & Safety issues for up to 20 employees.

In addition, start-up businesses that have been going for less than one year are eligible for two years' free business banking.

Brian Smart, director general of the bfa, commented: "The fund is a great way of encouraging new entrants into this vibrant sector. The UK franchise industry has performed well in recent years and we welcome the further investment to build on this momentum."

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