The era of banks making unsecured credit freely available to firms may come to an end as banks review the risk profile of practices that have converted to LLP status, it was suggested last week.

Chris Marston, head of professional practices at Lloyds TSB, told delegates at 360 Legal Group’s annual conference that banks will also seek much more data on firms’ work in progress, debtors, disbursements and creditors before agreeing to lend. There has been speculation that banks will look to tighten lending criteria in the wake of the collapse of regional giant Halliwells LLP.

Marston said: ‘Before LLPs, partners were jointly and ­severally liable for the firm’s debts. That is a massive reassurance for a bank… It’s important to understand that in looking at bank lending policy, we are wondering, will LLP change our customers? Are they more ­likely to walk away from debts?’

Marston also raised the prospect of a floating charge on the assets of the business. He said Lloyds TSB was committed to continuing with the lending that law firms needed in the current environment, and noted that the bank’s lending to firms rose 7% in the past year.