Small Businesses Granted Over £40m in Bank Loans via Appeals

Report reveals Appeals Process helped revoke over a third of rejected small business loans

Over the last three years, small businesses have received a total of £41.7m through the independent business loans appeal process, it was announced this week.

The report, conducted by independent external reviewer Professor Russell Griggs OBE, showed that a total of 3,518 appeals were made this year, rising from 3,311 last year and resulting in £13.1m of lending going into the small business community in 2014.

Over the three years that Griggs has been reviewing the process, there has been 9,006 small business loan appeals processed and 3,274 of these were reapproved (36.4%).

The report also highlighted the main reasons why businesses were declined loans; failed credit score is the highest at 43%, followed by affordability at 25% and account conduct at 10%.

The Appeals Process works systemically with banks and businesses, allowing small and mid-sized businesses with turnovers of less than £25m to apply for rejected loans to be overturned if they believe the rejection was lacking proper reasoning or if they feel they should have been offered better terms. Currently the process works with Barclays Bank, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander, Bank of Ireland, Danske Bank, First Trust Bank and Ulster Bank.

Griggs stated that every bank involved in the programme has changed something about their lending process and that his overall goal is to create a more honest and transparent relationship:

“[The Appeals Process works] to ensure they [banks and businesses] all have fair and transparent appeals systems in place and that they understand what all the numbers produced mean and the reasons behind them.

“I also think the positive impact that the Appeals Process is having on lenders is spreading amongst some lenders who are not yet part of the initiative, to the point that over the coming year both the TSB and the National Australia Bank Group (Clydesdale and Yorkshire) will join the Appeals Process.”

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