We spend a lot of our time thinking on how best to run our businesses. Should we rent, or buy our serviced office space, or work from home.
But maybe we simply shouldn’t bother. The reason that I’m saying that is because I have just had a set to with my bank. I solidly maintain that, contrary to what they are telling both the public and the government, the banks are not doing their bit to support small businesses.
Members of the Telegraph’s group for owner-managers have reported inconsistent lending decisions, increased personal security demands, progressively more expensive overdraft facilities and a lack of business knowledge among front line bank staff, in response to calls for banks to ‘ramp up’ lending to small companies.
British Bankers’ Association (BBA) figures show that Britain’s banks lent just £900m to small businesses last year. This is less than a quarter of the annual rate for the past five years. BBA claim that the numbers reflected a ‘reduction in demand for credit.’
Dragon and fitness-club entrepreneur, Duncan Bannatyne, recently called on banks to lend more to small businesses. In response, members of the Telegraph Business Club, told of a range of frustrating banking encounters, following applications for loans and overdraft facilities.
Richard Halstead, chief operating officer of drinks market research business, Wine Intelligence, said small and medium-sized companies ‘played the role of the financial services industry’s patsy: repeatedly hit up for fees, charges and extortionate rates of interest, without any real sign of true market competition to redress the balance… In our – successful [small business], eight year trading history, profitable for the past six – is a typical tale of draconian lending terms, a veritable layer cake of security (including my home) and an arbitrary 50pc hike in our interest rate last year, based on nothing more than the bank’s need to fill a nasty hole in its balance sheet.’
Well, I agree with Richard. I feel that the banks are too busy working out their own bonuses to deal with small business in the correct way. Yes, we may be more of a risk than a large blue chip company and we may not be quite as profitable. But, small businesses are the lifeblood of this country, as the more small businesses the more serviced office space taken.
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