Lloyds TSB pledge to help small businesses

Lloyds TSB has pledged to help its 600,000 small business customers by putting together a six-point ‘charter’ to help them weather the economic downturn.

The bank has also confirmed it will pass on, in full, any further cuts in interest rates throughout the remainder of 2008 and the whole of 2009, the measures will benefit customers with turnover up to £1 million.

In addition, Lloyds TSB will not change the price or availability of overdrafts during the period of a customer’s agreement (on average, one year) as long as their accounts are maintained within agreed limits.

According to Lloyds TSB, the charter has been designed to ‘inject much needed business confidence’ and denied it had succumbed to Government pressure.

The bank claims to be one of the few where lending has increased to small and medium sized businesses, with an increase of 18% over the past year, to around £18 billion.

The move has been welcomed by John McFall, chairman of the Treasury select committee. However, the chairman of RBS Business Banking, Peter Ibbetson, stated that Lloyds was merely copying its lead.

Last week, RBS said it would freeze overdraft charges for its business customers for at least a year, while also pledging not to withdraw its lending facilities for its 1.1 million business customers.

Discuss this in the Finance Markets forums

Story link: Lloyds TSB pledge to help small businesses