The Business Finance Taskforce has committed to seventeen actions in three broad areas from improving customer relationships, to ensuring better access to finance and offering better information.
The actions include improving service levels to micro enterprises – or firms with a turn over of less than £50,000 – with a new Lending Code, better service and offering other information resources.
Banks will also publish lending principles which clearly set out the minimum standards medium-sized and larger businesses can expect when asking banks for loans and other services.
The banks involved also plan to set up transparent appeals processes if loan applications are declined, with the process independently monitored by a senior independent reviewer, who will publish the results of each bank involved.
Toward the end of a loan term, banks will also be obliged to initiate a pre re-financing dialogue and assessment to outline the bank’s criteria to continue the loan agreement.
Other commitments include regional outreach events throughout 2011, improving information to customers and hosting a dedicated website through the British Banker’s Association (BBA) connected to further mentoring networks.
Chancellor George Osborne, in a joint statement with business secretary Vince Cable, said it was “an important first step” by the banks.
“We have been absolutely clear that banks need to improve the lending environment for small businesses,” the statement read.
John Varley chief executive of Barclays and chairman of the Taskforce said: “As banks, we have an obligation to help the UK economy return to growth. The private sector will play a key role in the recovery and it’s our job to help viable firms be successful.
“SMEs are particularly important as a source of job creation and growth.”
BBA chief executive, Angela Knight said the move demonstrated bank’s real commitment to helping their business customers.
“The proposals are substantial, wide-ranging and represent a real opportunity for the banks to provide finance, help and support both directly and through partnership with business organisations up and down the country. Our members appreciate they have a role to play in supporting the UK economy and are determined to play their full part in the nation’s economic recovery. “
The Business Lending Taskforce was set up following publication of the government’s green paper, ‘Financing a private sector recovery’ on 26 July 2010.
The Taskforce is made up of the CEOs and senior representatives from: Barclays, HSBC, Lloyds Banking Group, RBS, Santander, Standard Chartered and the British Bankers’ Association.
The Taskforce’s ull list of actions:
Improving customer relationships
1. Support a network of business mentors by working with existing mentoring networks and business groups to deliver this free service to small businesses across the UK
2. Improve service levels to micro enterprises (those with a turnover of less than £50,000 per annum) by setting out in a new Lending Code the levels of service banks will provide and outlining additional sources of help and advice
3. Publish lending principles which clearly set out the minimum standards medium-sized and larger businesses can expect when asking banks for loans and other services
4. Establish transparent appeals processes for when loan applications are declined, with processes independently monitored by a senior independent reviewer, who will publish the results of their review, to ensure each bank has a fair and equitable appeals process
5. Initiate a pre re-financing dialogue 12 months’ ahead of any term loan coming to an end, which will include a timely review of business and refinancing needs and an assessment of what needs to be in place ahead of loan expiry to maximise the prospect of successful re-financing.
Ensuring better access to finance
6. Establish and invest in a new £1.5 billion Business Growth Fund to fill a crucial gap in the market and provide capital for viable businesses which want to invest and grow
7. Support the Enterprise Finance Guarantee Scheme, seeking continued Government backing through to 2012, and accommodating any changes made by Government
8. Help mid-sized businesses access syndicated debt markets by raising customer awareness, training customer-facing staff and engaging more actively with business groups and customers
9. Improve access to trade finance through targeted SME awareness-raising campaigns and exploring possible regulatory adjustments with the FSA Improve access to trade finance products for businesses that qualify for the Enterprise Finance Guarantee Scheme
10. Signpost alternative sources of finance, giving customers helpful information and advice if a loan is declined and raising awareness about the financial solutions they should consider
11. Help improve the supply of credit to the wider economy, working with the authorities to ensure that wholesale markets can support the necessary lending capacity as the economy recovers.
Providing better information and promote understanding
12. Fund and publish a regular independent survey, commencing in early 2011to a methodology agreed with Government and business groups, so there is an agreed and authoritative set of data on business finance demand and lending supply
13. Enhance the cross-industry lending dataset by broadening the statistics on lending available for wider bands of business activity; on lending to deprived areas; and on national and regional data on the provision of bank support to business start-ups
14. Hold regional outreach events throughout 2011 with business groups to enable business customers and business groups to meet with key staff from the banks to answer questions and explain what services are available
15. Improve customer information including a review of literature and other materials, so customers can more easily understand what products will best meet their needs
16. Host a dedicated website through the BBA to draw together and link useful sources of information to help customers access the most appropriate information. This will also connect mentoring networks
17. Establish a Business Finance Round Table where senior representatives from the banks and business groups meet regularly to discuss and review trends, identify emerging areas of concern, ensure problems are addressed and facilitate the implementation of the Taskforce initiatives.
