Banks to aim on facilitating lending to small businesses

Following pressure form Prime Minister Gordon Brown and Mervyn King, BoE Governor, HBOS and Lloyds TSB have today revealed special measures are being taken in the form of new packages that are to be made available solely for small businesses.

Both under part-state ownership, the measures introduced are aimed to alleviate the financial pressures in the current economic climate.

HBOS is guaranteeing the pricing of overdrafts to small businesses for 12 months as well as making more liquidity available in terms of business development loans.

They also plan to introduce a business helpline in order to offer advice as well as a downloadable programme entitled ‘managing your cash flow’, which will be available on the website from this month.

Having secured a 250 million pound fund from the European Investment Bank, the bank is able to offer special discount rates to small and medium-sized enterprises (SMEs) and supplements a similar deal that is being made available at the Royal Bank of Scotland.

Meanwhile Lloyds TSB said it would pass on any further interest rate reductions next year to its SME customers and maintain overdraft limits at existing levels for those who need to make use of the facility as well as increasing lending under the small firms loans guarantee by up to 45 percent.

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