Banks respond to rate cut - commercial mortgages

12 January 2009

Several business lenders have responded to last week's Bank of England interest rate cut, something that may be beneficial for those with commercial mortgages.

Following the Bank's monetary policy committee decision to cut the base rate to 1.5 per cent, firms on tracker products may be able to make savings.

HSBC has revealed that around 97 per cent of its small and medium-sized business clients on floating-rate deals are set to benefit from the reduction.

Paul Thurston, the managing director of HSBC UK, remarked that accessible finance is a "key" issue for companies.

He commented: "Small and medium-sized businesses need to know that they can access appropriate finance if they need it and that it will be sensibly priced."

The lender has boosted the level of funds it will make available to small firms this year by £1.5 billion, he claimed.

Business customers of Lloyds TSB Commercial with variable loans and overdrafts will also benefit from the base rate reduction, the lender has announced.