Small and medium-sized UK businesses will welcome the recent agreement reached between the Government and five of the biggest banks in the UK on lending to businesses.
Following lengthy discussions (reported in the press as "Project Merlin"), the Government has disclosed details of the agreement reached with those banks, comprising of Barclays, HSBC, RBS, Lloyds Banking Group and Santander. The commitments include:
• a pledge to make available £190 billion (gross) of new credit to business during 2011;
• improving access to trade finance;
• putting in place a "transparent" process for making appeals in the event of loan applications being turned down;
• establishing and investing in a new £1.5 billion Business Growth Fund;
• establishing a new committed lending capacity of £76 billion for small and medium-sized enterprises during the course of 2011; and
• publishing a set of lending principles, the aim of which will be to set out the minimum standards needed for medium-sized and larger business.
The aggregate amount of new lending across the five banks will be tracked on a quarterly basis and the banks will make the lending figures available to the Bank of England.
For further information, please speak to any member of the Corporate Department.