To the UK Banks
“We ask the banks to recognise that Small Business Britain is one of your best customers. Small businesses’ demand for new loans is currently around £600 million a month (British Bankers Association, November 2009). Still, we are finding it hard to get your support. We need to do this together.”
Small Business Britain requests specific policy changes from the UK banking industry
- Better rates for small businesses
- Commitment to pass on Bank of England interest rate cuts
- Cap on overdraft and loan fees
- More limited use of personal guarantees
Context
There is a general feeling among small businesses that the UK banking industry could be a lot more helpful and supportive. The four policies outlined above are the most pressing. Understandably they focus on lending as this has been a key problem during the recession. Small Business Britain would warmly welcome any individual bank that steps forward and commits to these policy changes. By doing so, that bank would receive Small Business Britain’s gratitude and, potentially, custom. However, what is really needed is for the banking industry to sign up en masse.
Evidence of support
Within the Small Business Britain Survey, there were a series of questions concerning relationships with banks. Respondents gave the following replies to the question on what banks could do to best support their small business customers:
- 45% of all respondents felt that banks needed to offer better rates for small businesses
- 35% wanted interest cuts to be passed on in full to business users
- 20% wanted a cap on overdraft or loan fees
18% wanted banks to be less reliant on the need for personal guarantees when approving loans
Small Business Britain requires more dedicated customer support from the UK banking industry
- Commitment to improve customer service to small businesses
- Commitment to improve transparency to small businesses
- Commitment to improve financial advice to small businesses
Context
The fact of the matter is that over the past few years, many small businesses have felt unsupported by their bank and the victims of their bank’s inflexibility.
Small Business Britain needs trained small business advisors who have the ability and authority to provide flexible support to their customers. Whether in-branch or through a contact centre, the banks need to understand that small businesses cannot be treated in the same way as ordinary retail customers. Not only should the customer service have to be more personal, but the small business customer needs to be able to understand what support their bank is prepared to give. If a request is declined, then the bank should explain why this has happened and, most importantly, suggest practical alternatives that will help and support the business.
Evidence of support
Respondents answered strongly in support of the above three policies:
- 36% demanded better customer service
- 19% wanted better overall transparency
- 10% highlighted the need for more in-depth financial advice
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