Bank boss slammed for 'small firms aren't asking for loans' comments

Lucie Mitchell
Contributing Editor
Sift Media
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A war of words has broken out between the British Bankers' Association and small business representatives over comments made about small business lending.

The Federation of Small Businesses (FSB) has accused chief executive of the British Bankers’ Association (BBA) Anthony Browne of being "short-sighted" over remarks he made in an article in City AM, in which he stated that the reason banks aren’t lending to small firms is because there is a lack of demand for finance from SMEs.
"Over the past year, the number [of SMEs] wanting loans or overdrafts has dropped by about a fifth. The trend is similar in the number of SMEs that actually apply for these products. Approval rates have stayed roughly stable, but fewer applications inevitably means lower lending."
Browne also disputed the fact that banks’ refusal to lend to small firms is undermining the economy.
"Over the past year, just 1.5% of all SMEs had a loan rejected. Whatever problems the other 98.5% had, it wasn’t caused by a lack of lending," he remarked.
However, the FSB has reacted angrily to the comments, accusing Browne of debating old issues.
The article has prompted Graeme Fisher, head of policy at the FSB, to write a letter to City AM, which has been seen by In it, Fisher wrote:
"The argument about small business lending and supply or demand is stale. In his early days in post, we would have hoped that chief executive of the British Bankers Association would have shifted the debate onto more fertile ground.
"It is misleading when Browne says only 1.5% of small firms have been rejected loans by his member banks. According to the survey which the banks sponsor, a third of all loans applications and a fifth of all overdraft applications were declined. Issuing inappropriate statistics does little to boost confidence and ultimately leads to bad policy making."


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By MGS Motorsport
16th Nov 2012 13:40


This comment that you have posted giving this chaps outlook on lending to business to say the least has raised a few hairs on the back of my neck, what an absolute idiot to come out with a comment like this Uk small business owners are struggling to stay afloat because the UK public arnt spending money as they dont have any spare cash due to fuel and utility bills.

To sit there and say small business arent asking for loans is ridiculous they arnt asking as idiots like this man are in power and small business owners are afraid to get a refusal for a loan as this effects your personal or business credit rating.

I have asked for a loan to expand my business and all I was told to do was go away and prepare a business plan and then after spending all this time doing so only to be told that I didnt fit the criteria, what is the criteria I asked only to be told that I just didnt fit it so I turned round gave the manager a few choice words and told him where he could stick his loan.

It is this kind of attitude from a bank manager that makes Uk businesses think its not worth the hassle thats why they arnt asking for loans you idiot 


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By soap-deluxe
16th Nov 2012 19:07

 I agree with some of the comments about banks not lending to small businesses. When we read and hear that the government have "told" the banks to lend and you can't get anything from them then how does that work?

The public are not spending which is killing small businesses and it's the banks holding on to the cash that could keep these businesses going! I am struggling to even pay bills, mortgage etc  due to poor sales (this should be my "busy" time of the year) yet don't feel there is any point asking for help from my bank!

How can small businesses survive when those that have the cash and can help just keep hold of it even though told to share it????? Makes you wonder if the banks and Gov. care about small businesses and whether they think they are important to the countries ecconomy going forward. Todays small business could be the large employer in the future! We need the money and help now Mr. Bank Manager!!!!!


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By gocraig
16th Nov 2012 22:47

3 years ago, I wrote a Business Plan, applied for Credit from my bank and got it, the venture we obtained the funding for didnt work out, so we are now working to pay it off.

I appreciate that people get refused, but working in Financial Services, I know that typically 40% of all Credit Applications get declined.  This isnt restricted to Business Loans, its the same in Credit Cards, Personal Loans and Mortgages as well, so this rate is not uncommon.

So is it the case that only 1.5% of SMEs are being refuse loans?  I dont know how these stats have been arrived at.  If only 5% are applying for finance, then it could well be correct.

So does anyone know what percentage of SMEs apply for Credit, can this statistic be disputed?  In the end it doesnt matter, statistics are rubbish, they can be made to prove or disprove anything.

So maybe we just need to reassess.  Maybe we need to provide businesses with the confidence to ask, with assistance in writing a Business Plan, and with other opportunities to raise finance so that they can grow and create the revenue and jobs that this country so badly needs.  How about bringing back Business Link !!

One thing I must say though, whilst they have made mistakes, I dont believe the bank bashing in the press, or from the government is helping anyone.  And the government need to look a little closer to home before criticising others for not helping small business.

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By MGS Motorsport
16th Nov 2012 23:36

 Defending the banks what absolute rubbish the uk tax payer has baled them out and they still do as they please not only are they still giving bonuses they are putting charges up for businesses. If a UK business owner stuffed up the way they have they would be banned from running a business for life and would have ended up in jail, what happens with them the old boys school stick together and they get a wrap on the wrist asked to resign with a multi million hand shake, and you wonder why businesses and the genial public are pissed of at financial establishments. The government needs to stop this practise now not sweep it under the carpet as they are still doing . We should go back to the old way where banks actually had proper managers that could make desions at a local level not by a bunch of no faces sitting behind their computers staring at screens and crunching numbers. This isn't helping small businesses at all, local managers know their local needs not some wet behind the ears number cruncher. I do agree that some people should not have been lent money but once again this was down to the banks being greedy with getting bonuses the more you sold the better your bonus, what else would you do if you wanted a better wage at the end of the month.

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By Doug Knox
18th Nov 2012 10:33

Banks will conyinue to lend to those with good prospects of repaying principal and interest charges, as that is the basis of their trade.

Traders with depressed sales, and increased government taxes and red tape, may have reduced profit margins and make poorer prospects.

Perhaps the bankers have not registered as rejects, some of the requests that may look more like desparate last ditch disaster avoidance, than sound commercial prospects.

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By MGS Motorsport
18th Nov 2012 18:41


Yes maybe youre right the banks are okay and they do lend to good prospects I think you need to wake up and smell the coffee, just take the dyson scenario no uk bank would entertain Mr Dyson because it wasnt a good idea and it wouldnt work according to the bank. where did Mr Dyson end up going china to get his project of the ground and now look at his business it has a mutimillion pound turnover  and is a very successfull business , now tell me that the UK banks know what they are doing, Im not so sure, yes they are a business like any other establishement but they have spent years ripping people off and now they are suffering for it the general public and businesses will never trust the financial industry again and will now question everything they do.

When the banks were discovered to be ripping us all off they should have been made to sell of any assets that they had to cover their costs and not expect the uk tax payer to bail them out. As HMRC or customs  would do to any business with full force of the legal system. 

If I as a company tender for anything government orintated I have to be completely transparent right down to revieling my profit margins and my mark up on goods, now why cant the banks be made to do this as they are suppossed to be run for the people that actually keep them afloat and these financial institutions seem to have forgotten their role in society to keep our hard earned savings intact.

I think what we need is a bank that makes profit for its account holders not its shareholders the money that the bank invests should share the profit they make with their account holders Carrlsberg seem to have the right idea about how to run a bank maybe they should teach our financial sector how to do it.

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