The UK government and Lloyds Banking Group have reached a 1 billion pound ($1.62 billion) deal to enhance Lloyds business lending, the Financial Times reported on Tuesday.
The FT said the agreement, which has seen the British government guaranteeing half of the risk on an existing Lloyds short term loan portfolio, was struck just days ago.
In return, Lloyds agreed on more business lending. The bank was not immediately available for comment.
This deal would be the second of its kind, following a deal of the same size arranged in April between the government, Royal Bank of Scotland and Lloyds.
The scheme under which these two deals were arranged was announced by business secretary Lord Peter Mandelson in January.
(Reporting by Cecilia Valente)