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Home > Markets > Funding for Lending Scheme

Funding for Lending Scheme

The Bank and HM Treasury launched the Funding for Lending Scheme (FLS) on 13 July 2012. The FLS is designed to incentivise banks and building societies to boost their lending to the UK real economy.  It does this by providing funding to banks and building societies for an extended period, with both the price and quantity of funding provided linked to their lending performance.

The FLS allows participants to borrow UK Treasury Bills in exchange for eligible collateral, which consists of all collateral eligible in the Bank’s Discount Window Facility.

The Bank and HM Treasury announced an extension to the FLS on 24 April 2013.  This extends the scheme by one year to allow participants to borrow from the FLS until January 2015, with incentives to boost lending skewed towards small and medium sized enterprises (SMEs).  The FLS will also be expanded to count lending by banking groups involving certain non-bank providers of credit to the UK real economy. The Bank and HM Treasury announced changes to the terms of the FLS Extension on 28 November 2013 to focus it on business lending, by removing the direct incentives to expand household lending in 2014.

Usage and net lending data relating to the extension to the FLS can be found here.

Latest Information

News Release: Bank of England and HM Treasury Funding for Lending Scheme – 2014 Q2 Usage and Lending data  
28 August 2014

FLS Extension usage and lending data

News Release: Changes to the Funding for Lending Scheme Extension
28 November 2013

Market Notice: Changes to the Funding for Lending Scheme Extension

28 November 2013

Consolidated Market Notice: Funding for Lending Scheme Extension
28 November 2013

A Quarterly Bulletin article explains how the FLS will support the economy in more detail.

  The Funding for Lending Scheme 
2012 Q4 Quarterly Bulletin article