Britain's car building boom has not gone unnoticed by one bank, which intends to boost the UK based component making business with a new "tooling fund".
The Royal Bank of Scotland has earmarked £25m for companies that wish to invest in tooling equipment used for the manufacture of components for British car plants.
Would-be component makers have found it challenging in the past to finance new tooling equipment for a number of reasons. A general reluctance to lend combined with the high cost of tooling have made the proposition tricky. In addition, the unusual way tooling equipment is owned makes it more complex.
When a firm wins a contract from a car maker, it must pay for the tooling machinery outright, but that tooling will ultimately be owned by the manufacturer. Cash flow issues can arise because the component maker is not paid for the tooling equipment by the car factory until production begins.
UK firms are failing to cash-in on the booming car industry, say experts, because funding for tooling is so hard to come by – resulting in a great deal of tooling work going overseas where finance is easier to obtain.
Britain's car output rose from 1.3m to 1.6m cars last year, amounting to £25bn of annual exports.
And unlike years gone by, UK motorists are buying home-built cars; reliable, affordable products – just like startrescue.co.uk's superb value car breakdown cover.
Head of automotive at RBS, Richard Hill, said: "When a supplier receives the good news that they have won a contract, invariably they are given a requirement to fund making the tooling."
The resurgent British car market has a £3bn need for new tooling, according to the Society of Motoring Manufacturers and Traders (SMMT), as demand for new vehicles rises.
Around one third of components used in British cars come from the UK.
Breakdown Cover from 
