Lloyds promises to help 300,000 start-ups

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The Independent Online

Lloyds Banking Group will today seek to distance itself from criticism of the banks' failure to support small and medium enterprises with the launch of new commitments to the sector, including a promise to help 300,000 new SMEs start up by 2012.

The bank, which last week announced the UK's biggest rights issue as it seeks to shore up its balance sheet and avoid further state support, said it would "meet every reasonable request for competitive, commercially priced finance from viable business customers".

Lloyds said it would not withdraw overdrafts from customers during the term of their agreements, as long as they kept within their limits, and also said it "would do its best" to support businesses struggling to stay afloat during the recession. The bank is responding to criticism – particularly of those institutions which have had significant taxpayer support – from business groups which have claimed its unwillingness to lend to all companies, but particularly those in the SME sector, has been holding back the recovery.

A common criticism has been that even where banks have been willing to lend , they have significantly raised the cost. But Lloyds said it is publishing a list of pledges about the cost of lending, including a commitment to greater transparency.