f you are looking for business funding from your bank, you need to gather all sorts of information to back up your application. Of course, your outsourced bookkeepers are the ones to advise you on putting the best possible case, and hopefully, you’ll get what you want. But what happens if you don’t?
Making an Appeal
The big 5 banks – Barclays, HSBC, RBS, Lloyds and Santander – recently agreed to set up an appeals process for businesses that have been turned down for a loan. If you have made a formal request that was declined, and you think the decision was unfair, you have the right to make an appeal and should ask how to proceed. On receipt of your appeal, the bank must have their decision reviewed by another member of their staff who was not a party to the decision-making process. You should receive the result of the review within 30 days.
This will only apply if you’ve gone through the formal application process, not if you’ve just had informal discussions and been informed that you haven’t a chance with them. But in that case they should be giving you advice about other possible sources of funding, or how to go forward without it.
Responsibilities of the Bank
While there are no guarantees that the bank will agree to reverse the decision on appeal, you should get some similar benefits from the process. If you don’t get the loan, the bank should offer you advice on where else to try for funding, or provide support in a different form. They might, for example, put you in touch with a business mentor who could help in some way.
This has come about because of the Better Business Finance Campaign spearheaded by the Business Finance Taskforce of the BBA, which calls itself ‘the leading trade association for the UK banking and financial services sector’. It remains to be seen how helpful the right to appeal will be for SMEs, but it has to be another step in the right direction following the banks’ commitment to setting up a new £1.5 billion Business Growth Fund over the next few years.