I just read the other day that another initiative of regulation has been brought to the world. This time it is called Business Banking Insight and it is described as a “tool to enable small businesses to compare different providers in the lending market place”. There is also a great deal of space for anonymous comments about the various lenders – forgive me for asking, but what is the benefit of that? If you compare the example with Trip Advisor you know that there are sometimes misleading comments or many comments which are self-promoting and/or which slag off competitors.
We already have a robust regulatory system in the form of the Financial Ombudsman; do we really need a second one?
In addition, this initiative seems to overlook the core problem for business lending. To arrange a business loan today is so complex – it requires so much time and effort to obtain all the necessary information and present it to a bank. The problem is not comparing providers. The problem is having the resources and the time to deal with the providers. And from our experience, small businesses simply haven’t got the time. In addition, the general economic climate is a far greater hindrance for businesses as it is very demotivating. Our experience shows that any sensible business can arrange sensible business finance from a variety of sensible lenders (albeit, and let me reiterate, it is a pretty detailed and complex task). Really what we don’t need is another regulatory scheme or another information scheme which serves no real purpose.
What do you think?