At the end of January, I read that the British Bankers’ Association said that banks were now willing to lend more to small businesses. BBA boss Anthony Browne claimed that the “banks are open for business.”
This would appear to be good news to small businesses and entrepreneurs, and seems to suggest that things might be starting to look brighter for those who wanted finance for their business, but were previously unable to get it through their banks.
But then I read a bit further, and there didn’t appear to be much substance to this claim. In fact, it was just the launch of a year-long marketing campaign, which aims to raise the confidence about bank lending to small businesses. The BBA claimed that only 37% (yes, you read that correctly!) of small businesses, actually believe that they will get approval from a bank when they apply.
Well, we think that there are many reasons why this number is so low. And we don’t think a marketing campaign is going to solve it.
Small businesses aren’t going to the banks because they don’t get treated as they should be. We have arranged finance for many small businesses and entrepreneurs, who are excellent candidates for finance, but have been turned down by the banks on a technicality, or have had nobody with whom to discuss their finance requirements. If the banks want to get small businesses on board, they need more than a marketing campaign – they need to know their customers better. Small businesses are not form-filling robots – they are run by human beings who are dedicated to make their business contribute to the economy.