During the depths of the credit crunch access to finance was consistently quoted as the number one barrier to growth. This concern led to a swath of initiatives to encourage banks to lend more, none of which can claim to be a huge success.

However, whilst the access to finance barrier remains steadfastly in place for some businesses, there is clear evidence that many SMEs have successfully overcome this hurdle and got a ‘yes’ from their bank.

Throughout the credit crunch an independent research group, the SME Finance Monitor team, have been engaging with up to 5,000 SMEs each quarter to find out about their experiences of dealing with banks.

The findings have been a fascinating insight in to what is really going on and the last report to the quarter-ended June 2015 reveals that more businesses than you may think are getting a ‘yes’ from their bank.
With an improving economy the myth that the majority of businesses are struggling to get finance is slowly being eroded.

In terms of a successful outcome to a finance request what does the latest SME Finance Report reveal?
For mature businesses which applied for a new or renewed loan and/or overdraft facility in the 18 months to June 2015 the team found that a staggering 79% ended up with a facility. Higher than you thought?

The success rate has steadily been climbing with the latest result moving up from 67% seen in the previous 18 months to quarter 4 2013.

What do the figures look like for loans or overdraft requests on a separate basis?

Of the businesses that applied for an overdraft facility 84% were successful compared to 69% for loan applications; you will be more successful if you apply for a short-term facility.

Let’s drill down further; what about businesses that applied for finance for the very first time? Perhaps not too surprisingly they struggled more than repeat borrowers in getting what they requested. The outcome for first-time applicants was that 58% were successful; more work to do here!

The one finding that always comes as a shock to some is exactly how many businesses actually want to borrow. The assumption is often that a large majority of businesses are in need of finance. Each quarter though the SME Finance Monitor team blows this view out of the water.

In the latest report, when asked whether they have borrowed in the last 5 years or plan to seek finance in the next 3 months, those SMEs who answered ‘no’ are termed as Permanent Non-Borrowers. The result was that 49% of SMEs fell into this category and this has steadily increased over time, up from 34% in 2011. That means that almost half of the SMEs questioned have no interest in borrowing!

When the question on appetite to borrow is focused on a shorter period the figure is even more surprising. On being asked if they have borrowed over the previous 12 months, those SMEs answering ‘no’ were classified as Happy Non Seekers and 80% fell into this category. I’m sure you’ll agree that this figure is higher than most people would assume.

The message here is twofold: don’t automatically assume you’re going to get a ‘no’ from your bank because the majority of your fellow business owners are getting what they need. And secondly don’t fall into the trap of thinking that all businesses want to borrow; many are perfectly happy where they are.

There’s nothing more demoralising or agonisingly annoying than hearing the word ‘no’ from your bank.

What to do? Silently walk away shaking your head as you unceremoniously put your Business Plan in the nearest bin or do you decide to fight back because you feel your bank has misunderstood the opportunity?

If you’re a fighter, and you genuinely believe the bank has got the decision wrong, there is a way to get the bank to re-look at your request. Yet despite there being a formal appeal process many business owners don’t realise that such an avenue exists.

The Origins of the Loan Appeal Process

Back in 2010, during the depths of the credit crunch, the government spearheaded the formation of the Business Finance Taskforce. Made up of all the major banks the aim of the taskforce was to come up with actions to make access to finance easier.

One of the 17 actions was that each bank was required to establish a formal Loan Appeal Process whereby businesses which felt that the ‘no’ from their bank was unfair had a route to ask that their application be re-considered.

Who Can Appeal?

There are three key eligibility criteria which have to be met before a lending application appeal can be launched:

1. The company’s group turnover must be less than £25 million
2. The appeal must be made within 30 days of the decision being communicated
3. No previous appeal requests have been made in respect of the same application

The Appeal Process

If you have satisfied the eligibility criteria and you wish to appeal the decision you can request details on how to proceed directly from your bank, either via your Relationship Manager or by searching on the bank’s website.

Alternatively you can visit the Better Business Finance website and fill in the form with all your key details.

Once your appeal is lodge an independent team, which was not involved in making the original decision, will review your application. In carrying out the review of the original decision they may contact you for further information or clarification on certain points.

Typically the bank has to get back to you with an answer within 30 days of you lodging the appeal.

How Successful Has the Initiative Been?

In requesting each bank to establish its own Loan Appeal Process it was realised that the banks needed to be held to account to ensure the process was robustly implemented.

To fulfil this role Professor Russel Griggs an external, independent reviewer, was appointed to conduct regular on-site and off-site monitoring of each bank’s appeal process. Professor Griggs and his team report on a quarterly and annual basis and his findings have proved to be a useful insight into how banks are dealing with appeals.

Latest Loan Appeal Request Findings

The latest review covering the quarter from April to June 2015 revealed that there were 858 appeals of which 196 were successful. That equates to a 23% overturn rate and resulted in businesses successfully borrowing an additional £1.5m.

But how does the success rate compared to previous years?

In the latest report Griggs notes that in his first review for the year to March 2012 the overturn rate was 40% compared to 23% in the last quarter. On first glance it would appear that the banks are going backwards with fewer successful appeals. However, Griggs explains this apparent slippage by saying that the banks are now better at weeding out marginal applications early on by providing more proactive support. The outcome of this is that those applications which make it to appeal are more marginal and hence the overturn rate is declining.

So if you are at the receiving end of a rather blunt ‘no’ from your bank, and you feel that the decision is wrong, take control and start the loan appeal process.

In this episode of the Business Finance Bulletin Rob Warlow reviews the latest report on the banking sector’s Loan Appeal process which reveals how many businesses are successfully overturning a ‘no’ from their bank.

In the crowdfunding world there’s news from Funding Circle on a change in the way interest rates are calculated which should benefit both borrowers and investors.

Continuing on the topic of alternative finance Rob shares an announcement by card payment provider iZettle that it intends to start offering loans to its clients based on the volume of card business being transacted each month.

Where do you go to for advice? Rob looks at the findings from a recent survey which reveals one of the key sources business advice which may not be the best!

And in the Business Finance Tip of the Week a clip from an interview in which Rob talks about why the sector you operate in is important to the bank.

If you prefer to listen to the podcast version you can both listen and download by clicking below. If you are on itunes then you can access via our itunes channel.

In this latest episode of the Business Finance Bulletin Rob Warlow looks at an appeal from the CBI for the government to help medium-sized business access long term loans by introducing a number of new initiatives.

Rob shares findings from a new report which suggests that banks are now feeling under threat from the growing band of alternative finance providers with the solution being if you can’t beat them then join them!

To combat struggles that small businesses have in accessing invoice discounting facilities Rob has news about moves by the government to make it easier for businesses to release cash from outstanding invoices. Continuing the theme
of late payment Rob also outlines a useful service which can speed up payments due.

And in the Business Finance Tip of the Week Rob talks about why you need to think about the security you are prepared to offer your bank.

If you prefer to listen to the podcast version of this episode by either clicking below or downloading below via our SoundCloud page or on our itunes channel.

In the latest Business Finance Bulletin episode Business Loan Services’ Rob Warlow looks at Amazon’s entry into the small business lending market by extending loans to businesses operating on its Marketplace.

In the latest figures from the Bank of England Rob looks at the level of support being given by banks to small business with continuing evidence that more finance is going out of the banks’ doors.

If you want to avoid the High Street banks Rob shares news of a new £40m SME fund launched by Enterprise Ventures in conjunction with Santander and the Greater Manchester Pension Fund. The fund seeks to provide loans to businesses across the UK, in all sectors and for a variety of purposes.

In the Business Finance Tip of the Week Rob talks with Rebecca Jones, the Red Shoe Biz Woman, on developing an entrepreneurial mindset amongst your staff.

If you would like to listen to the podcast version you can do so but clicking below. If you wish to download to your phone or PC, click the download image below or subscribe to our itunes channel.

In the latest Business Finance Bulletin episode Business Loan Services’ Rob Warlow looks at how business owners are becoming more aware of alternative finance and willing to consider it as an option to obtain funding. Rob also shares news from Funding Circle of their new bridging loan product.

The Funding for Lending Scheme, launched by the government in 2012 to boost lending to small businesses, may not have been roaring success, but Rob looks at statistics which shows signs of improvement in usage by the banks involved in the scheme.

A clean Credit Report is one thing a lender will look for when assessing a finance request but such don’t necessarily provide a complete picture… until now. Rob shares news from Experian on how additional information now being shared will provider lenders with a better understanding of an applicant’s financial position.

In the Business Finance Tip of the Week Rob chats with Gareth Pritchard of Lloyds Bank Commercial Finance in which talks about the key features of Invoice Discounting.

You can also listen to this week’s edition in a podcast version by clicking below to listen or download. You can also subscribe via our itunes channel.

In the latest Business Finance Bulletin episode Business Loan Services’ Rob Warlow looks at highlights from the most recent SME Finance Monitor Report which reveals a number of interesting findings on how businesses are dealing with the issue of raising finance.

In a report from Hitachi Capital Rob looks at how business confidence is on the rise with more businesses looking forward to growth.

Relative newcomer to the banking market Metro Bank is looking to shake up the Invoice Discounting industry with changes announced to its service.

In the Business Finance Tip of the Week Rob chats with Nick Rowe from PricewaterhouseCoopers in which he shares their thoughts on the four levers of growth which small businesses need to be mindful of when planning ahead.

You can listen to this week’s edition as a podcast. To download to your phone, PC click below via our SoundCloud page or go to our itunes channel and subscribe.

In the latest Business Finance Bulletin episode Business Loan Services’ Rob Warlow looks at the latest statistics on bank lending to small businesses which show that banks are starting to provide more support.

Evidence of an increase in bank appetite to lend to small businesses is starting to show as Rob discusses news from HSBC of renewed focus it is giving to supporting UK small businesses.

You may not expect one of the Dragons Den panel to turn to crowdfunding to raise finance but that is exactly what Kelly Hoppen has done. Rob looks at a pitch Kelly has launched on crowdfunding platform Crowdcube.

In the Business Finance Tip of the Week Rob looks at the short term finance market in a chat with Max Woodman from Catalyst Finance and how they are helping businesses fill short term cashflow gaps.

If you prefer to listen to this episode of the Business Finance Bulletin you can listen below or download to your PC or phone.

You can also listen via our itunes channel here.

In the latest Business Finance Bulletin episode Rob Warlow looks at a recent report from the British Business Bank on the low level of awareness and activity in selling equity to raise growth finance.

If you are sold on the idea of selling equity Rob looks at Crowdcube’s statistics for the first quarter of 2015. Crowdcube are demonstrating how raising growth finance via the crowd can work.

The latest Entrepreneurs Index from Barclays and the Business Growth Fund reveals a strong growth in the number of UK start ups but offset by an apparent slowdown in fast-growth companies. And in terms of business confidence generally Rob looks at the latest survey from Lloyds Bank which reveals growing levels of optimism amongst businesses.

In the Business Finance Tip of the Week a clip from a live seminar in which Rob talks about the importance to the bank of the purpose of your loan request and how you are going to use the money.

If you prefer to listen to the podcast version then simply download it from our SoundCloud page by clicking below.

In the latest Business Finance Bulletin Rob Warlow looks at recent surveys from Close Brothers and the government’s Business Innovation and Skills Department on growing confidence levels amongst business owners in the UK.

Rob also looks at the latest figures from the Bank of England on the Funding for Lending Scheme which shows a continued downward slide in support from banks.

Late payment continues to be a problem for growing businesses and Rob looks at how the government is tackling the problem with revisions to the Prompt Payment Code and new rules designed to ensure the public sector pays on time.

In the Business Finance Tip of the Week Rob chats with Market Invoice, the online crowdfunding platform, which helps UK businesses unlock cash tied up in outstanding invoices.

If you would prefer to listen to the podcast version of this week’s Bulletin simply click below or download to your computer or phone.