RBS, NatWest Launch GBP100 Million Loan Fund For Franchise Industry

Royal Bank of Scotland Group PLC (RBS.LN) and its unit National Westminster Bank PLC (NWBD.LN) said Monday they are making GBP100 million in new loans with discounted fees available to the franchise industry.

"Everybody wants to see banks funding business growth, as well as helping new businesses get off the ground to create jobs. This is exactly what this fund will deliver," Peter Ibbetson, chairman of small business at NatWest and RBS, said in a statement.

The fund has a 1% arrangement fee, which is lower than usual 1.5%, a spokesman said. Also, nothing needs to be paid in the first year.

The fund can potentially finance up to 1,800 new franchise businesses and create 24,000 new jobs, based on typical start-up costs, with franchisees employing around 13 staff, the banks said in the statement.

A survey by NatWest and the British Franchise Association showed that the franchise industry's turnover rose to GBP11.8 billion in 2009, at the height of the financial crisis, up by GBP400 million from 2008.

The research shows that there are around 35,000 franchisees and 850 franchisors employing over 450,000 people in the U.K.

-By Vladimir Guevarra, Dow Jones Newswires. Tel. [phone], [e-mail]