February 2015 SUPPORTING BRITISH BUSINESSES In 2014 we met our SME Charter pledge to grow our lending by at least £1 billion net to SMEs. We have made a further commitment to grow our lending to SMEs by £3 billion net over the next three years. Our year-on-year net growth in advances to SMEs was 5% in 2014, while across the industry there was a net reduction of 2%. Overall this means our lending to SMEs has grown 19% net since 2011, while it declined 16% across the industry as a whole during the same period. At the start of 2014 we set a target to lend an additional £4 billion to manufacturing businesses over the four years to December 2017. At the end of 2014 we were ahead of our target and had provided £1.04 billion against this pledge. We have published all our lending data for SMEs, mortgages and personal lending by postcode sectors across the UK. It can be found on our website through our postcode lending calculator. SUPPORT FOR GOVERNMENT SCHEMES Ø We are continuing to offer competitively priced lending to SMEs in all sectors for the life of their loans with support from the Funding for Lending Scheme. Ø We are taking part in a range of other Government schemes designed to help businesses get access to finance, including the Enterprise Finance Guarantee (EFG) Scheme. We have supported over 6,200 EFG loans, worth more than £520 million – around 23% of all loans granted through the scheme so far. We continue to offer EFG lending with no arrangement fees, where the Government provides guarantees to the bank when clients lack the necessary security. Ø Since 2013, we have offered grants through the Regional Growth Fund (RGF) to support clients looking to invest in assets but who lack the necessary deposit for the purchase. We have now distributed our full grant fund of £25 million from the Government department for Business, Innovation & Skills (BIS), supporting more than 370 clients and lending over £100 million. OUR FINANCIAL SUPPORT FOR SMEs Ø Unlike many other banks, local decision-making is an important part of the service that we offer our customers. In 2014 we doubled the amount our most senior managers can lend for renewals to £1 million, while for new lending the maximum is £500k. We are still approving eight out of ten loan and overdraft requests – a rate which is independently verified and in line with our long term average. Ø Ø We offer 18 months free dayto-day banking for start-ups. Our charges are transparent. Through our Monthly PricePlans, customers can pay a simple, fixed monthly fee to cover their day-to-day banking transactions. CONTINUED >> IN NUMBERS 5% YEAR-ON-YEAR NET GROWTH IN ADVANCES TO SMEs. £1bn NET INCREASE IN LENDING TO SMES IN 2014. 8 out of 10 LOAN AND OVERDRAFT REQUESTS APPROVED. DOUBLED THE AMOUNT OUR MOST SENIOR MANAGERS CAN LEND FOR RENEWALS TO £1m 107,000 START-UPS SUPPORTED IN 2014. MORE THAN 56,000 JOBS PROTECTED THROUGH OUR BUSINESS SUPPORT UNIT IN 2014. Ø Our private equity division, Lloyds Development Capital (LDC), plays a crucial role in supporting SMEs. In the 12 months ending December 2014, LDC invested over £248 million in 16 companies. Ø We are committed to providing alternative sources of finance for our customers, including asset based lending, trade finance and community finance where we have a partnership with Greater London Enterprise. We are providing funding of £5 million, which will be lent on to microbusinesses across the Capital. Ø We’re also working closely with the ‘Angels in the City’ investment community, having joined forces with City of London and London Business Angels. Since April 2013, around 300 investors have attended the various AITC workshops that we have hosted. Ø We have announced a new £50 million equity fund for SME house builders which is designed to help these firms access capital for new projects, and ultimately to help THE COST OF BORROWING Ø The absolute cost of borrowing for Lloyds Bank customers has more than halved since 2007. Ø In August 2014, 86% of Lloyds Banking Group’s new variable rate term lending to SMEs was at an interest rate margin of 4% or less over base rate. Ø Lloyds Bank’s arrangement fee tariff has not increased since 2008. Ø Lloyds Banking Group has promised that arrangement fees on loans and overdrafts will not be greater than 1.5% of a customer’s facilities (subject to minimum fees for small facilities). Ø Since the beginning of 2012 we have made no significant changes to credit policies. Lloyds Banking Group only seeks security where appropriate, on a case by case basis, reflecting risk and type of facility. tackle the issue of housing supply and affordability. THE ECONOMIC ENVIRONMENT Ø Our Business in Britain report (January 2015) shows that business confidence fell from its record high in July. However, business expectations for total sales, orders and profits in the next six months remain positive and above their long-term average. Ø Our SME customers still have substantial headroom on overdrafts. Less than 55% of our borrowing facilities are being drawn upon – lower than in 2009. OUR BROADER SUPPORT FOR SMEs Ø Through our 2014 SME Charter we met a series of pledges to help support our customers. These included: •A pledge to help 100,000 new businesses start up in the year. We beat this commitment and helped 107,000 new businesses start up in 2014. •Our own Appeals Pledge, which goes beyond industry agreed guidelines. We have committed to look at 90% of customer appeals within 15 working days, and make a goodwill payment wherever a decision is overturned in a customer’s favour. • A commitment to grow our provision of trade finance, by 25% in order to support SMEs and boost exports. Ø Through the Business Finance Taskforce, we are delivering 17 measures to help businesses by improving customer relationships, ensuring better access to finance and promoting a better understanding of the industry. We have been leading the Business Finance Taskforce mentoring initiative and we now have more than 400 mentors across the UK, more than any other bank. Technology Centre, Coventry, to address the sector’s skills gap in the UK. The centre is due to open later in 2015. Ø In partnership with the University of Warwick, the Warwick Manufacturing Group, the Engineering Employers’ Federation and the Manufacturing Technologies Association we have trained more than 280 managers across the UK in manufacturing awareness to help enhance the support we offer manufacturing businesses. Ø Our Business Support Unit (BSU) is continuing to help businesses in financial difficulties. Throughout 2014 it helped more than 1,600 businesses onto a sounder financial footing and protected 56,000 jobs. Most of the businesses helped were SMEs. Ø Ø Ø We are helping businesses understand and act upon the risks and opportunities of sustainability. We have a free of charge online tool to help SMEs create their own action plans and we have a network of trained Business and Environment Managers to help provide guidance and support. Working with partners including the Eden Project, local government, Energy Saving Trust and NISP, we run events and workshops around the UK that focus on the real business benefits of sustainability. Ø Lloyds Banking Group continues its support of the UK manufacturing sector. We have launched a £1 million-a-year sponsorship of the Lloyds Bank Advanced Manufacturing Training Centre at the Manufacturing We are supporting our business customers through our network of over 2,000 customer facing staff, as well as through our dedicated internet site which received more than two million views a month throughout 2014. Lloyds Banking Group has committed £50 million to Big Society Capital, to help create a sustainable social investment market in the UK. Ø We are investing £1 billion in digital and mobile services for our customers, to help give them more choice in how they bank with us. We have launched a mobile app for businesses, which means customers can view their account details and make payments or transfers from their mobile phones and we are developing more ways for our customers to interact with us through digital channels. Ø We are a founding partner of Go ON UK, the Digital Skills charity. We provide a range of online toolkits to help improve businesses’ digital skills.
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