SME Charter - Our commitment to supporting UK business

Lloyds TSB Commercial, as part of Lloyds Banking Group, has further underlined its support for UK businesses by building on the commitments of its original charter for small and medium enterprises, the SME Charter, launched in November 2009.

Our commitments for 2012 are detailed below. These commitments are intended to help stimulate demand and boost access to finance for SMEs, to assure Lloyds TSB Commercial customers of clear and fair terms, to encourage enterprise and to provide guidance to help businesses grow successfully.

The measures in the SME Charter have been designed to benefit business customers with a turnover up to £15 million:

Encouraging Enterprise

- measures which will help support people starting and growing businesses and in turn help support the economy:

• We will help encourage and support over 100,000 new businesses to start up.
• We will run a programme of at least 200 seminars nationwide to provide expert guidance and support for SMEs on subjects including starting up, employment, exporting, sustainability and finance, as well as specialist seminars for the healthcare, education and manufacturing sectors.
• We will enhance online guidance and support to business customers on issues including starting up, sustainability, procurement opportunities and finance and will offer online registration for our seminars.
• We will launch and develop an export mentoring scheme together with UK Trade and Investment and the Manufacturing Technologies Association.
• Through our Enterprise Awards in partnership with the National Association of College and University Entrepreneurs (NACUE), we will support an increase in the number of students and graduates actively engaged in enterprise and enterprise societies from 50,000 to 70,000.

Access to Finance

- commitments building on the Group's growing lending to SMEs, which aim to boost confidence:

• Having exceeded our lending commitments in 2010 and 2011, we will provide at least £12bn of new gross lending to SMEs in 2012.
• We will deliver positive net lending in 2012.
• We will maintain individual lending authorities for our relationship managers including an ability to lend up to £500,000 at a local level.
• We will meet every reasonable request for competitive commercially-priced finance (whether short-term or long-term) from viable business customers.
• We will give customers the right to appeal where a lending decision has been declined. We will respond to 90 per cent of appeals with a decision, within 15 working days.
• We will not change the availability of overdrafts during the period of a customer's agreement, as long as their accounts are kept within agreed terms and limits.
• We will do our best to support any viable business through temporary difficulties and turnaround to recovery.

Clear and Fair Pricing

- pledges to help ensure firms have clear information and certainty about the finance they receive:

• The price of existing loans or renewed overdrafts will reflect our cost of funding. The margin we charge over our cost of funding will only increase where there has been a material increase in risk. We will be transparent about our pricing and help customers understand the price of their facilities. Where margins increase, we will provide a clear explanation of the reasons.
• All our fees will be competitively priced. And arrangement fees on loans and overdrafts will not be greater than 1.5 per cent of the overall value of the facility. As in 2007, to cover our administration costs for smaller facilities, there will be a minimum scale charge of between £100 and £250.
• We will continue to empower customers by developing products with a transparent and flexible pricing structure such as Lloyds TSB Commercial's Monthly PricePlan tariff for business current accounts.

Supporting Communities

• We will invest £20m in community finance projects in 2012 including support for businesses in deprived areas.
• We will promote and facilitate staff volunteering to enable over 20,000 hours of staff time within our Commercial Banking division to help businesses grow in their communities.
• We will continue to help customers identify and secure new business opportunities as we've done for the London 2012 Olympic and Paralympic Games, where one third of contracts have been awarded to Lloyds Banking Group customers.

John Maltby, Group Director, Commercial, Lloyds Banking Group said:

"Our business is supporting businesses. That is what we do. Times have been tough for Britain's small firms, but our commitment to them is unequivocal and we want them to know that, as and when they need to borrow, we are ready and waiting to lend.

"We have committed to lend £12 billion in 2012, focusing on the small businesses that are the lifeblood of our economy and we hope that this pledge proves to be the confidence boost that will help to kick start real growth.

"Our support stretches far beyond lending. Businesses also need to know that our pricing is fair and transparent; that we can offer different types of finance; and that we will work to encourage enterprise. They also need the assurance that we will support them at a local level and that they can appeal with confidence. It is these issues our Charter, spearheaded by our new lending pledge, aims to address."