Lloyds Bank to help boost UK automotive supply chain

Posted on 16 May 2016 by Jonny Williamson

Businesses in the automotive supply chain that need to invest in bespoke tools to complete contracts are to get specialist support, thanks to the launch of a new Tooling Finance product by Lloyds Bank Commercial Banking.

Tooling Finance is tailored to manufacturers with a proven track record in the UK automotive supply chain, and provides up to 90% of the project cost upfront, with typical terms of up to 24 months.

By freeing up cash that would otherwise be tied up in machinery, tooling finance aims to take the pressure off working capital and provide ambitious businesses with the capital to invest in growth, according to Lloyds Bank.

It has been developed specifically to back the 2,049 firms and 78,000 workers in the UK automotive supply chain, and comes with support from Lloyds Bank’s experienced manufacturing relationship managers.

David Atkinson, head of Manufacturing - SME, Lloyds Bank Commercial Banking.
David Atkinson, head of Manufacturing – SME, Lloyds Bank Commercial Banking.

UK head of manufacturing for SME at Lloyds Bank Commercial Banking, Dave Atkinson explained: “We have a deep understanding of automotive manufacturing and know that the UK is one of the most attractive locations for investment in the sector.

“As a result, our clients through the supply chain are seeing increasing opportunities for growth.

“We also understand that high up-front costs can make investing in growth very difficult for firms that are looking to grow. To help them, we have developed a tooling finance solution that will support automotive manufacturers and suppliers in funding bespoke tooling.

“With end production sometimes not occurring until 12-24 months after tooling requirements are identified, cashflow pressures can affect working capital. Tooling finance can help alleviate that pressure.

“Manufacturing has never been more important to the success and growth of the UK economy, with the automotive industry representing about 8% of UK manufacturing output.”

The launch comes as the Society of Motor Manufacturers and Traders (SMMT) reports that UK car production grew 9.8% year-on-year in March, with 159,074 cars built – one every 16 seconds.

Mike Hawes, chief executive, SMMT.
Mike Hawes, chief executive, SMMT.

SMMT chief executive, Mike Hawes commented: “The UK’s automotive supply chain is currently undergoing a resurgence.

“However, we know that there is still a £6bn opportunity in this sector of the industry and new financing options will enable companies to grow to their full potential.”

Lloyds Bank has pledged to provide £1bn of new funding to the manufacturing sector every year until 2017, and has invested in training more than 300 manufacturing specialists, accredited by the Warwick Manufacturing Group through the University of Warwick.