Finance Fred Heritage · 25 July 2017
Lloyds scraps up-front arrangement fees on small business loans
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.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.