We believe it is important for businesses to know how they should be properly treated by their bank and what they need to do during their relationship with their bank. Two sets of minimum standards have been created, which outline what you should expect. The Lending Code applies to personal and small business customers, whilst the Lending Principles have been created for larger business customers.
The Lending Code is a self-regulatory code of practice which sets standards for financial institutions to follow when they are dealing with their individual or personal customers and micro-enterprise customers. It provides valuable protection for these customers and explains the standards they should expect day-to-day and in times of financial difficulty.
The Lending Code is sponsored by members of the British Bankers' Association, the Building Societies Association and the UK Cards Association.
It covers, loans, credit and charge cards, current account overdraft facilities but does not apply to merchant services, non-business borrowing secured on land or to sales finance.
The full Lending Code is available on the Lending Standards Board Website .
Key commitments to you
Lenders will act fairly and reasonably in all their dealings with you. They will make sure:
A Guide to the Lending Code for Micro-Enterprises explains the commitments which apply to businesses than employ fewer than 10 people and whose annual turnover or balance sheet do not exceed £2m euro.
In addition to the Lending Code, the UK's five largest banks have developed a set of Lending Principles for Larger Businesses (PDF). These Principles apply to businesses with a turnover of less than £25 million but do not cover the smaller business segment, which is protected by the Lending Code.
The Lending Principles for Larger Businesses set out the minimum standards larger firms can expect when dealing with their banks.
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