Banks are open for business again
Posted on 23 Jun 2010
At the same time as today's budget statement, the British Banker's Association has announced a set of six principles designed to improve lending to small businesses. The high street banks have all agreed be bound by these principles.The banks commitment to SMEs are listed below:
- Banks are happy for SMEs to bring their professional advisers with them to support them in their discussions with their business manager. (Acknowledging shadow directorship boundaries in the provision of advice)
- Banks will use either in house guides or industry-standard literature to provide guidance on the factors that determine pricing
- Banks will always inform customers of the time it will take for a lending decision to be taken, starting from the point when a full suite of information is provided to complete an application
- Banks will ensure they have fair and effective processes in place to review decisions to decline a lending request
- Wherever practical banks will provide proactive and clear feedback to SMEs when a decision has been taken to decline a borrowing request and what next steps they might take, for example contacting Business Link for further advice and support
- Banks will work with SME representatives and with the Lending Code standards board to promote both these initiatives and the Lending Code itself.
In recent meetings with BIS (Deparment for Business, Innovation and Skills) ActSmart strongly encouraged Government to enforce one of the banks which 'we own' to take a lead and develop itself as a 'centre of excellence' in small business lending.
ActSmart believes that the current UK banking structure is the greatest draw back in lending to small businesses. "Banks simply don't have the infrastructure, knowledge or people who understand small business, investment, risk and reward. By making a bank take the lead and change its structure, small business investment could yet again become a profitable part of the UK banking structure and encourage competition and opportunity in a dead arena" said Mark Walmsley of ActSmart.
