Barclays is offering its SME customers an “instant cashback injection” of 2% on loans.

Called “Cashback for Business”, it follows the Barclays cashback loan offered under the £1.5 billion National Loan Guarantee Scheme (NLGS). As the NLGS cashback has now been fully used following strong customer demand, the bank is continuing with cashback loans under the new Funding for Lending Scheme (FLS).

Meanwhile Barclays is cutting the rates on some of its fixed rate mortgages tomorrow by up to 0.30 percentage points.

This will include a two-year fixed at 3.09% (70% LTV). For those with smaller deposits, rates will be reduced by up to 0.20 percentage points.

Barclays is also passing on the benefit to first time buyers by reducing its NewBuy mortgage (95% LTV) by 0.20 percentage points and cutting the rate on its Great Escape remortgage package at 70% LTV to help homeowners who have recently been hit by other mortgage providers’ increased Standard Variable Rates (SVRs).

“The cost of borrowing for UK SMEs has reached very low levels,” said Steve Cooper, chief products and segments officer at Barclays.

“SME borrowing is at its cheapest since 1987, and the combination of Funding for Lending and low base rates is also pushing down the cost of borrowing for personal loans and mortgages with super-low rates.

“Barclays will pass on the whole benefit we derive under Funding for Lending to our customers and we are optimistic that people will take advantage of this cheap time to borrow, and make the investment decisions that they have been putting off.”