Lloyds-HBOS merger could affect SMEs

The recent merger of HBOS with Lloyds TSB could have a negative effect on small businesses, a pressure group has warned.

Representatives from the Forum for Private Business (FPB) believe that the merger will lead to less competitive lending rates and choice, resulting in more financial woe for small to medium enterprises (SMEs).

The chairman of the FPB, Noel Guilford, said: "Accessing finance in order to maintain a healthy cash flow is always a key issue for small firms - now it has become a matter necessary for survival as much as growth."

"The FPB is urging… small businesses… to take steps to protect themselves, such as seeking alternatives to traditional funding streams."

Mr Guilford added that reduced borrowing capacity, branch closures and declining service capacity were all harming SMES.

Research by netregs.gov.uk earlier this week revealed that British SMEs can save up to £60 million a year by complying with "green" legislation.