The US may now officially be in a recession, but the financial situation of some small businesses in the UK looks set to improve. Lloyds TSB and HBOS are taking steps to pass on interest rate cuts to their customers.
There are some potential holdups, mind you. First, the two banks are actually merging, so progress in this one area might be dependent on all other sorts of steps. Then, the banks are looking for government bailouts, so if taxpayers or a bunch of officials start to feel a little tight-fisted, the plan could be in trouble.
Still, the plan should inspire hope. The BBC reports, "Lloyds has a new six point charter that includes promising to pass on future interest rate cuts to its customers with turnover below 1m a year. Bank of Scotland, part of HBOS, wants 250m of funding from the European Investment Bank to allow it to lend to small businesses at discounted rates."
Furthermore, "Lloyds is also promising not to change overdraft terms during the term of a company’s agreement, which is usually 12 months, and will not change the terms on renewal unless the company’s risk profile has changed. It will agree to any reasonable request for short term financing and will host business advice seminars around the country."
The UK’s small businesses should consider doing a little shopping around in terms of the banks they use, or at least see if their current banks can match any of these conditions.