Encouraging Enterprise
 Media Hero Tile. 

Business optimism is a vital ingredient of any recovery. And to help provide a confidence boost to business across the UK, Lloyds Banking Group has launched a new 2012 Charter for small and medium sized businesses (SMEs).

The new Charter includes measures to stimulate demand and boost access to finance for SMEs; provide guidance to help businesses grow successfully; and clarify the terms on which the Group will lend to its customers.

The measures benefit all of the Group’s business customers, with a turnover up to £15 million and fall into three categories:

Encouraging Enterprise - measures which will help position small and medium sized businesses to grow and lead the recovery as it starts to take shape:

• We’ll help encourage and support 300,000 new businesses to start up by 2012.
• We will run a programme of 200 nationwide seminars every year for the next three years, to provide expert guidance and support for SMEs on starting up, employment, exporting, bidding for 2012 contracts, sustainability and finance.
• We will provide online advice and support to business customers on issues including starting up, sustainability, procurement opportunities and finance.
  

Access to Finance - commitments building on the Group’s growing lending to SMEs, which aim to boost confidence:

• We will meet every reasonable request for competitive commercially-priced finance (whether short-term or long-term) from viable business customers.
• We will not change the availability of overdrafts during the period of a customer’s agreement, as long as their accounts are kept within agreed terms and limits.
• We will do our best to support any viable business through temporary difficulties and into the recovery.
  

Clearer and Fairer Pricing – pledges to help ensure firms have clear information and certainty about the finance they receive:

• The price of existing loans or renewed overdrafts will reflect our cost of funding.  The margin we charge over our cost of funding will only increase where there has been a material increase in risk (subject to a minimum 1.5 per cent over the cost of our funds).  We will be transparent about our pricing and help customers understand the price of their facilities. Where margins increase, we will provide a clear explanation of the reasons.
• All our fees will be competitively priced.  And arrangement fees on loans and overdrafts will not be greater than 1.5 per cent of the overall value of the facility. As in 2007, to cover our administration costs for smaller facilities, there will be a minimum scale charge of between £100 and £250.
  

John Maltby, Managing Director, Commercial, Lloyds Banking Group, said: “Just as businesses needed support during the depths of the downturn, it is critical that we give them the right guidance and help them grow as the momentum of recovery starts to build. Through the pledges we have set out today, to encourage enterprise, boost access to finance and provide clearer and fairer pricing, we hope to give businesses across the country the confidence they need to grow and lead the UK out of recession.”