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He's currently behind Sam Ricketts and Alton Thelwell for the right-back spot in the Tigers first team, and Phil Parkinson has suggested that Yeovil would be allowed to sign him permanently if they're impressed over the next month.
Lynch has only made 17 appearances since joining City on a free transfer last year, the last of those being in January.
Meanwhile, former Newcastle winger Martin Brittain - who was on trial with City during pre-season before being released - has signed for Championship rivals Ipswich on a one-year deal.