New Appeal Process for SMEs Denied Business Bank Loans

Under the Business Finance Taskforce's ‘Better Business Finance' campaign, small businesses which are refused a business loan from one of the UK's five main banks can now launch an appeal.

The appeal process will apply to businesses with a turnover of less than £25 million that perceive that they have been unfairly refused loan finance. Businesses will have the right to request within 30 days that the application is reviewed by someone else within the bank, and if still unsuccessful, the bank must now provide information on alternative sources of finance, or put them in touch with a mentor.

The process will be reviewed by an independent panel, led by former Confederation of British Industry SME Council Chairman, Richard Griggs.

British Bankers' Association spokesman, Brian Mairs, said:

"Businesses must launch an appeal within 30 days of hearing their bank's decision, or it will just be considered as a new application. All they have to do is tell the bank they are unhappy that they have been refused finance, and it will be reviewed by another member of staff. However, they may be asked for additional information.

"The appeals process encourages the business as well as the bank to drill deeper into the application to see why it was refused, and the process will be accountable to the review team."

Federation of Small Businesses Head of Policy, Andrew Cave, said that the appeals process was unlikely to increase bank lending to small firms:

"Although there is an external panel monitoring the process, it's still up to the banks whether they accept or refuse appeals.

"There will be some cases in which the appeals process works, and another individual in the same bank decides to approve the loan. But even if the chief executives of the banks say they have the right procedures in place to ensure viable businesses get credit, they won't necessarily have communicated this to branch level."

 

Ways to get in touch

For further information on the appeals process please visit the Better Business Finance website http://www.betterbusinessfinance.co.uk/help-support/factsheets/appeals-process

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