Businesses premises rates - knowledge is power
What are the impacts for small businesses of Alistair Darling’s break up of RBS and Lloyds? Will increased competition be enough to get the wheels of commerce turning once more or will credit remain scarce for the UK business owner?
Is bad news for banks a silver lining for small businesses?
The EU competition regulator has turned its eye on the post-apocalyptic landscape of the UK banking sector and found it wanting. While the dust is still settling, Alistair Darling has had to respond by setting out how the Royal Bank of Scotland (RBS) and Lloyds Banking Group must fall into line.
RBS in particular is facing some tough changes. It’s being forced to get rid of all its Scottish NatWest branches and its Williams & Glyn branch network. Among other moves, these changes will see the RBS market share of business banking fall from 30% to 25%. Similarly Lloyds will be compelled to let go of Cheltenham & Gloucester, Intelligent Finance and Lloyds TSB Scotland.
Regulators believe this increase in competition will attract new players with fresh ideas to the market. The resulting increase in liquidity will hopefully mean more credit available for small businesses.
In order to ensure the break-up doesn’t simply result in today’s big players becoming even bigger, the likes of Barclays and HSBC are to be barred from bidding for the assets on sale. Santander, owner of Abbey, however, may be allowed to examine the pickings as it currently has less than 8% of the UK small business lending market.
But with five years for the banks to divest themselves of the components in question, the small business world is unlikely to see drastic improvement to the credit market any time soon. So for many, other lines of credit such as invoice finance become a valuable option in the fight for business survival. If you’d like to find out more about invoice financing on behalf of your clients, call Cashflow UK on 0800 132 156 for more information .
