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There is now an All Party Parliamentary Group (APPG) on Fair Business Banking. I know from the years that I have been on CAG that many have found themselves in dispute with their banks and when it comes to SMEs in this position, there is really nowhere to turn. The FOS is of little or no assistance and the legal route is usually financially impossible. That is where the APPG comes in and is working hard to change things so there is a level playing field. Here is a link to the APPG site http://www.appgbanking.org.uk/ The APPG site tells how you can become involved and it is also currently asking for case studies for the forthcoming inquiry. Here is a link to that: http://us15.campaign-archive2.com/?u=4db7ef3d08358a0aafbe5f312&id=e9e076cf4e My particular case revolves around LPA Receivership which has been discussed extensively on CAG and this is one of the many areas the APPG is looking into. If you require any further information, please contact me through CAG. Thank you, Joan Keeley
Evidence of "misconduct" among banks has been uncovered in a Government adviser's report. Vince Cable, the Business Secretary, has been handed a dossier which its author says reveal banks’ “disturbing patterns of behaviour” towards small and medium-sized businesses. Government adviser Lawrence Tomlinson, who produced the research, said he had “exposed activity which flies in the face of the Government’s growth agenda”. Activities which “impede lending” include alleged malpractice in banks’ restructuring divisions. Mr Tomlinson accused banks of loading punitive charges on struggling companies to maximise returns and bonuses and of “making directors passengers in their own businesses”. He also highlighted what he said were conflicts of interest between banks and accountancy firms brought in to do “independent business reviews” of companies placed in restructuring divisions. Mr Cable finds the reports “worrying”, a business department spokesman said. Since “a number of the cases” in the dossier involve Royal Bank of Scotland, the Business Secretary has asked that they be considered by an independent review of the state-backed bank’s lending practices, which is being led by Sir Andrew Large, a former deputy governor of the Bank of England. More: http://www.telegraph.co.uk/finance/yourbusiness/10214202/Banks-treatment-of-SMEs-criticised-in-report.html
Small companies are often being rejected by banks based on “personal issues” with founders' credit ratings rather than problems with their business plans. An official report into appeals by businesses against banks’ lending decisions found start-ups and very small companies are at times being “judged harshly” based on personal credit scores, leading to them being turned away “automatically ... before a proper exchange can be had”. The study also revealed that almost 40pc of decisions to reject applications for bank loans are overturned when companies use an independently monitored appeals process which was described as “the best kept secret in banking”. The Federation of Small Businesses said the high “overturn” rate showed “banks have some way to go to improve their internal systems”. The appeals process was established in 2011 as part of the Business Finance Taskforce, an organisation set up in 2010 by the British Bankers’ Association (BBA) to look at ways to help small businesses following the financial crisis. Russel Griggs, the author of the report, said banks are now lending in a “normal” way and the lack of bank lending is down to a weak economy and a lack of demand from businesses. Link: http://www.telegraph.co.uk/finance/yourbusiness/10117014/Personal-issues-behind-banks-rejection-of-SMEs.html