Banks still not helping SMEs

Kevin Cooke, sales & marketing director at Business Lending said: “The recent announcement by Lloyds to make 625 staff redundant from their SME lending division really sums it up. We are seeing many excellent quality cases presented to us at Business Lending that have been turned down by high street banks for it seems no real reason. With what we hear from our brokers there is ample proof that there is still a huge gap between the hype of increased lending and the reality.

“Lending from banks has not improved markedly and there is no sign that this situation is going to change any time soon. We know from the deals that cross our desks; we can see first hand evidence of banks’ reluctance to fund good quality deals. Unfortunately, we are only able to take on a small number.

“A mortgage we recently completed on behalf of well established NACFB London broker, Strategy Finance, is a case in point. The client wished to buy a fish and chip shop and needed a 63% LTV mortgage, well supported both by historic trading accounts and profits from his existing business. With experience of running retail food outlets and supported by an acceptable survey, the broker was at a loss to why it had been turned down by high street banks.

“After all the money that has been poured into banks by the government, with the proviso that they begin to lend again, this latest redundancy news in the very department which is crucial to new lending is a slap in the face to SMEs. There’s a crying need to help good businesses and we know from the cases we see that there is a tremendous opportunity to not only offer assistance to hard pressed SMEs but also to generate rock solid new business lending which will stand any stress test and generate good returns.”