Lloyds is to increase UK SME lending by £1bn, but GTR understands that there is to be no change in the bank’s lending criteria.
Should the target be accomplished, it would lead to a 3.5% rise in Lloyds’ net lending to small UK firms, which stood at £28.2bn in 2013.
But rather than widening the goalposts in terms of lending criteria, the bank is to “encourage more businesses to come forward and invest to help them grow”, according to Stephen Pegge, external relations director.
The bank has also announced a doubling of its lending limits for regional managers, who will now be permitted to lend up to £1mn without central approval. It also plans to increase trade finance to overseas businesses by 25% in 2014.
The announcements followed on the heels of Bank of England statistics which found that in January, lending to businesses fell by £600mn, with SME lending falling by £300mn. Furthermore, while participants in the government’s Funding for Lending Scheme (among which is Lloyds) grew their lending by £5.8bn in Q4 2013, it was below the £6.2bn growth reported for Q3.
The bank has dubbed its plan for small business its “SME Charter”, and Pegge says that despite coming in the same week as the UK Budget, it is part of a longstanding plan to support small businesses. He says: “This follows on from publishing our Helping Britain Prosper Plan at the beginning of March which illustrates the importance that the bank places on responding to some of the big issues faced by the UK today.”
He says the charter will “make it easier and quicker for businesses to get the funding they need at the right time. For those customers renewing facilities, most of these decisions will be made locally with the benefit of the closer knowledge and speed that comes with that”.