Lloyds scraps up-front arrangement fees on small business loans
Lloyds bank wants to encourage entrepreneurship across the country
High street bank Lloyds has scrapped all arrangement fees for small business owners requesting term loans of up to £25,000.
From July 2017, business customers will no longer be required to pay up-front fees when looking to borrow amounts up to £25,000 – a move Lloyds hopes will free up cash for entrepreneurs and small business owners to invest in their ventures.
The rule will apply to existing Lloyds loans being refinanced (as well as all new loans), providing that the total amount of the refinanced loan is not more than £25,000.
Secured and unsecured Lloyds loans will not be subject to the arrangement fee removal, the bank has confirmed, and if a small business customer borrows on a secured basis, other fees, such as valuation fees, may apply to the loan.
The lender also announced that Lloyds loans of more than £25,000 for businesses will continue to be subject to the bank’s existing arrangement fee tariff.
In a statement, retail business banking director at Lloyds, Jo Harris, said: “We want to make it easy for business customers to bank with us. That’s why we have completely removed arrangement fees from business loans under £25,000, taking away the up-front costs of setting up a loan.”
The move is part of Lloyds’ drive to encourage entrepreneurship across the country. The bank has pledged to enable 100,000 UK startups launch throughout 2017, and another 1,000 to grow into £1m turnover businesses within three years.
The arrangement fee structure on term-basis Lloyds loans will change as follows. After 19 July, any business owner borrowing an amount up to £5,000 will pay nothing compared with a £100 arrangement fee previously.
Any business owner borrowing between £5,001 and £10,000 will pay nothing, compared with a £175 arrangement fee previously, whilst owners borrowing between £10,001 and £15,000 will pay nothing compared with a £250 arrangement fee previously.
A Lloyds business customer borrowing between £15,001 and £25,000 will pay nothing compared with a 1.5 per cent arrangement fee previously (with a minimum of £250), while a business owner taking out a Lloyds loan of £25,001 or more will continue to pay a 1.5 per cent arrangement fee going forward.
Last year, Lloyds made further pledges to support small UK businesses by launching a new internet banking and international trade portal, encouraging exporting.
Harris went on to say: “We are committed to helping UK businesses prosper, – so that they can focus on what they do best, making their business thrive.”
Google, Barclays and Lloyds step in to drive the government’s digital strategy
Sign up to our newsletter to get the latest from Business Advice.