HBOS £250 million small business support package
British bank HBOS plc yesterday said it would use £250 million of European funding to offer more attractive lending facilities to small and medium-sized businesses in the UK. HBOS, which is being bought by Lloyds TSB and is set to receive up to £12.5...
British bank HBOS plc yesterday said it would use £250 million of European funding to offer more attractive lending facilities to small and medium-sized businesses in the UK.
HBOS, which is being bought by Lloyds TSB and is set to receive up to £12.5 billion of public money in a government bailout, said funding from the European Investment Bank (EIB) would enable the Bank of Scotland to provide company loans to its customers at a significant discount - up to 80 basis points - to standard rates.
Shares in HBOS, which have lost over 85 per cent of their value since the start of the year, were 1.7 per cent up at 92.1 pence early yesterday.
The Edinburgh-based bank said it was working with the EIB to define how the funding will be made available to SME customers. HBOS said it would guarantee pricing on Bank of Scotland small business customer overdrafts for 12 months from the date of arrangement for new loans and renewals.
It added that it would maintain the link between small business overdraft rates and the base rate of interest rather than LIBOR, the rate at which banks lend to each other.
Small business customers will continue to benefit immediately from any cut in interest rates, said HBOS, which added that it would maintain overdraft facilities for 12 months from the date of arrangement or renewal and will not make them repayable on demand.
"We understand the financial pressures that they are facing during these difficult economic times," Adrian Grace, managing director of Bank of Scotland Commercial said in a statement.
"That is precisely why we have launched this package of measures - to provide both financial assistance and, equally importantly, some reassurance that the bank is committed to supporting small business throughout the UK."
HBOS, which is being bought by Lloyds TSB and is set to receive up to £12.5 billion of public money in a government bailout, said funding from the European Investment Bank (EIB) would enable the Bank of Scotland to provide company loans to its customers at a significant discount - up to 80 basis points - to standard rates.
Shares in HBOS, which have lost over 85 per cent of their value since the start of the year, were 1.7 per cent up at 92.1 pence early yesterday.
The Edinburgh-based bank said it was working with the EIB to define how the funding will be made available to SME customers. HBOS said it would guarantee pricing on Bank of Scotland small business customer overdrafts for 12 months from the date of arrangement for new loans and renewals.
It added that it would maintain the link between small business overdraft rates and the base rate of interest rather than LIBOR, the rate at which banks lend to each other.
Small business customers will continue to benefit immediately from any cut in interest rates, said HBOS, which added that it would maintain overdraft facilities for 12 months from the date of arrangement or renewal and will not make them repayable on demand.
"We understand the financial pressures that they are facing during these difficult economic times," Adrian Grace, managing director of Bank of Scotland Commercial said in a statement.
"That is precisely why we have launched this package of measures - to provide both financial assistance and, equally importantly, some reassurance that the bank is committed to supporting small business throughout the UK."