Banks pledge small business support

News Article - 03 December 2008
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A number of banks have announced plans to help their small business clients deal with the economic downturn.

HBOS has said that its Bank of Scotland business banking division is seeking £250 million in funding from the European Investment Bank (EIB).

This would allow it to offer lending to its 180,000 small business customers at a rate of 0.8 per cent off the standard rates.

Lloyds TSB - which is currently in the process of merging with HBOS - has also announced a six-point 'charter' on helping businesses.

It will make a pledge to pass on any more reductions in the base rate, as well as offering 12-month guarantees on pricing and overdraft facilities.

Whether or not the Bank of England is to further decrease its base rate will be decided at meetings of its Monetary Policy Committee (MPC) currently underway, with an announcement tomorrow.

Analysts have predicted a cut, with estimates of the size ranging between 50 to 100 basis points.

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