United Trust Bank (UTB) has secured an ENABLE Build guarantee via the British Business Bank.
The new guarantee is the first to be issued under the ENABLE Build programme and will allow UTB to significantly increase the amount of development finance it provides to UK SME housebuilders. Over the lifetime of the £250m guarantee it is expected to help support the construction of over 2,700 units of new housing through the provision of more than £500m of funding to SME housebuilders.
The new guarantee follows UTB’s previous ENABLE Guarantee which to date has helped support the construction of over 1,800 units of new housing and provided more than £340m of funding to SME housebuilders.
The British Business Bank’s ENABLE Build is a variant of its ENABLE Guarantee programme and allows the Bank to increase its support to banks that wish to fund smaller housebuilders. As a sector, SME housebuilders and developers have traditionally struggled to access the finance they need.
The ENABLE Build programme is designed to encourage additional lending to smaller housebuilders by reducing the amount of capital required to be held against such lending by the participating bank. Under both the ENABLE Guarantee and ENABLE Build programmes, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.
Reinald de Monchy, Managing Director, Guarantee and Wholesale, British Business Bank, said: “We are very pleased to announce our first ENABLE Build transaction, continuing support for smaller housebuilders to gain access to the finance they need. The ENABLE Build guarantee will help UTB provide the extra finance that smaller housebuilders require to allow them to grow, succeed and build, while diversifying the housing market and delivering thousands of homes and jobs in the process.”
Harley Kagan, Chief Executive Officer, United Trust Bank, said: “Many SME housebuilders rely on specialist lenders like UTB to access the funds they need to keep building and growing. I am delighted that we are once again collaborating with the British Business Bank to increase the availability of development finance. This ENABLE Build guarantee will help us to increase our ability to support the SME housebuilding sector.
“The previous guarantee contributed to the construction of around 1,800 new homes by SME housebuilders and ENABLE Build will allow UTB to go even further. The programme is another great example of the positive impact specialist banks and government agencies can have when they work together to achieve a common goal.”
Housing Minister, Rt Hon Christopher Pincher MP said: “Small housebuilders are vital to building the homes this country needs but too often struggle to access affordable finance. The ENABLE Build programme allows lenders to fund more SME housebuilders and get more shovels in the ground.”