business bank loans

Fear of Rejection Puts SMEs Off Applying for Business Loans

More than half of small businesses didn’t approach their bank for finance in the last year, because they expected to be turned down, research has revealed. Market research consultancy BDRC Continental’s SME Finance Monitor report, commissioned by the British Bankers’ Association (BBA), found that 55% of businesses employing nine or fewer staff did not apply for a bank loan in the last 12 months, because they feared they’d be rejected. The survey also highlighted that some businesses were more likely to have their lending applications turned down, including smaller employers and sole traders, those seeking new rather than renewed funding and firms less than ten years old. However, the BBA pointed to the report’s figures which showed that four in five overdraft ... »

£450 million of Discounted Business Bank Loans for SMEs

Small businesses will be able to access an extra £450 million of discounted loans after two high street banks negotiated extra European funding. Santander and the Royal Bank of Scotland (RBS) have secured the funds from the European Investment Bank (EIB). RBS will be offering £300 million at 0.6% below its standard interest rate; Santander has £150 million to lend at 0.7% below its usual rate. Santander’s head of commercial banking, Steve Pateman, said the loans – aimed at small firms with fewer than 250 employees – would help boost economic recovery by making affordable capital available to small businesses at a time when they really need it, saying: “We’ll be able to assist more small and medium-sized customers with their expansion plans at discounted ... »

Demand for Business Bank Loans Down

Demand for bank loans fell sharply among small businesses in the first quarter of 2011 — and the number of defaulted repayments went up! The Bank of England’s (BoE) quarterly Credit Conditions Survey (PDF), based on feedback from bank and non-bank lenders, also found that credit availability to small businesses fell in the same period — despite a Government agreement with the four biggest UK banks to increase lending to small and medium-sized businesses by 15% to £76 billion this year (Project Merlin). According to the BoE report, the situation for small firms from January to March contrasted strongly with that for medium-sized and larger businesses, both of which saw an overall improvement in credit demand and availability. “Lenders attributed the fall in small-business demand to se... »

SMEs Denied Business Bank Loans Can Appeal

Small businesses which are refused a business loan from one of the UK’s big five banks can now appeal against the decision, following the launch of a new initiative by the Business Finance Taskforce. Part of the taskforce’s Better Business Finance campaign, the appeals process will give firms that unsuccessfully apply for finance the chance to have their application reviewed by someone else within the bank. The banks must provide unsuccessful businesses with information on alternative sources of finance, or put them in touch with a mentor. A panel of independent reviewers, led by former Confederation of British Industry SME Council chairman, Richard Griggs, has been appointed to monitor the appeals process and produce an annual report of its effectiveness. British Bankers’ Association spok... »