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 episode of the Business Finance Bulletin Rob Warlow looks at the latest review on the UK banks Loan Appeal Process – how successful are business owners in turning a ‘no’ into a ‘yes’?

Crowdcube, an alternative source of finance, has launched a Mini-Bond scheme and Rob explores how that works and how you could use it in your business.

Banks and crowdfunding platforms are now starting to accept that working together may be the way forward with news that a UK High Street bank has partnered with a leading peer-to-peer lending platform.

And in the Business Finance Tip of the Week Rob talks with Alister Betts of Lucid Ventures on how to get you and your business ready to seek outside investors via selling equity.

In the latest episode of my Friday Business Finance Bulletin just out I look at the Chancellor’s latest attempt to boost bank lending to small businesses by looking at the possibility of providing a guarantee to the banks.

I also talk about the alternative lending scene following a recent interview I did on BBC Radio with Adam Tavener of Alternative Business Funding where we discuss crowdfunding and peer to peer lending.

In the Tip of the Week I discuss the bank’s Loan Appeal process. Did you know that if your bank has declined your loan request then you have a formal right of appeal? In this tip I share how to go about that.