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Mervyn King writes to van man over loan refusal

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  • 07/03/2013
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Mervyn King writes to van man over loan refusal
Sir Mervyn King, the outgoing governor of the Bank of England, has written to a small business owner to offer his sympathies after the man's own bank refused him a loan.

Mike Benson, whose business is based in Bromsgrove, Worcestershire, wrote to King after his bank – Bank of Scotland – refused to grant him a £10k loan to go towards the cost of a new transit van.

According to the BBC, who Benson contacted, King surprisingly responded in person, offering his understanding of the difficulties small businesses are facing.

He reportedly wrote: “I was sorry to read of the difficulty you have had in trying to replace your transit van.

“I can fully understand how maddening that, and the behaviour you describe from the banks you have spoken to, must have been.”

Benson’s business, supplying parts for air compressors across the world, has been profitable for the past 15 years. It exports to countries as far afield as the US, Chile and the Marshall Islands in the north Pacific Ocean.

On the face of it, his business is exactly the kind that should be supported by the banks, but a lack of fixed assets to offer as collateral in return for the loan meant the bank refused Benson’s request.

King suggested he try one of the UK’s new banks, such as the Swedish firm, Handelsbank. However, Benson eventually had to buy the new van with his own cash.

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