We open our latest Bulletin with news of another tranche of money released as part of the RBS bailout package. Designed to improve competition in the small business banking market, eleven banks have the opportunity to incentivise small business owners to switch from RBS.

Paypal may not immediately jump to mind as being an alternative lender but since 2014 their Working Capital loan product has been a life line for small businesses in need of finance. Available only to Paypal clients, we look at how loan usage has jumped over the last 12 months.

Despite everything going on politically and economically, a new survey from Hitachi Capital reveals that many small businesses are planning growth. What are their top three growth priorities?

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

The Enterprise Finance Guarantee Scheme has been a successful programme to help businesses access finance when they have no security. To open our latest Bulletin, news that ethical lender Robert Owen Community Banking Fund has joined the list of lenders offering access to business finance via EFG.

Following the government’s bailout of RBS in the aftermath of the credit crunch, the first recipients of an RBS-financed £775m fund has been announced. The fund is designed to promote and improve competition in the small business finance market. We look at the first three banks to benefit and their plans.

With Brexit looming, we close with the announcement from UK Finance of a new initiative, ‘Let’s Talk Business’. The campaign is focused on encouraging businesses to engage early with their banks if they are likely to need finance.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

As we get closer to the Brexit deadline, thoughts are turning to potential support businesses will need in a worse-case scenario. To open our latest Bulletin, we have news that RBS has set aside funds to provide financial support to businesses trading in Europe who may find themselves in a tight financial spot.

As highlighted in recent Bulletins, the Asset Finance sector continues to grow in terms of facilities to allow businesses to acquire assets. To continue the flow of available funds, we look at the announcement from the British Business Bank that it has allocated funds to asset finance provider Henry Howard Finance for on-lending to small businesses.

To close, our monthly review of bank lending to businesses. The latest figures from UK Finance reveal that bank lending continues to slip with limited demand for finance from businesses. Business owners seem to be adopting a ‘wait and see’ approach when it comes to making investment decisions.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Stitcher or itunes channel.

In this Business Finance Bulletin, a look at the launch of the British Business Bank’s ‘Help to Grow’ scheme with £30m of loans being channelled through Lloyds Bank aimed at helping high growth and innovative firms.

New research from UHY Hacker Young has revealed how small businesses are taking a disproportionately high share of fines imposed by HMRC compared to their larger counterparts. We take a look at why that is.

It’s important you know what’s contained in your Credit Report and yet according to a recent survey carried out by Which, a large number of people have never looked at their report. We explain why you should do so when it comes to borrowing money.

And to close we have news from the Royal Bank of Scotland on how it’s going to signpost businesses it can’t help to alternative lenders via its new Capital Connections platform. It’s all part of the government’s drive to encourage banks to offer alternative lenders if they say ‘no’.

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In the latest Business Finance Bulletin Rob Warlow looks at the announcement from the Royal Bank of Scotland (RBS) that it will now be referring small businesses which it can’t help with finance on to crowdfunding companies

Funding Circle and Assetz Capital. This is a major sign that the crowdfunding industry is now going mainstream.
Another form of alternative finance which is proving popular with small businesses is family and friends. Rob looks at findings in a survey from Everline which reveals how many small businesses use this form of finance and why.

In the Business Finance Tip of the Week Rob shares a clip from a seminar he delivered in Amsterdam at a Kevin Green Advanced Business training weekend. In this clip Rob shares one of the reasons why cashflow can prove to be a strain for many businesses.

If you prefer to listen to this week’s Bulletin as a podcast you can click below or click the download icon to load it on your phone or PC.

In the latest Business Finance Bulletin Rob Warlow looks at how Handelsbanken, one of the UK challenger banks, are supporting SMEs by increasing the amount of money they have lent out.

Rob also looks at the news that RBS may be launching its own peer-to-peer or crowdfunding platform at the end of the year. How times are changing!

Banks are still getting their wrists slapped for the flouting the rules with this week’s revelations that HSBC and First Trust Bank have been pulled up by the Competition and Markets Authority.

Rob looks at a recent survey by Experian which reveal that many business owners are not assessing how creditworthy their clients are before giving out credit terms.

And in the Business Finance Tip of the Week, a clip from a live seminar in which Rob shares a strategy on controlling overdue payments.

You can also listen to this week’s Bulletin in audio as a podcast. To listen either click the image below or you can download the episode to your PC or phone via Soundcloud.

Posted on 04.11.2013, by Rob Warlow

Back in July in this blog we reported that RBS decided to request an independent review of its lending practices with the objective being to enable RBS to enhance its support for SMEs while maintaining safe and sound lending practices. With the review having been carried out the findings reveal that RBS and its subsidiary Nat West has much to do in overhauling its lending processes.

The investigation, headed by former Bank of England Deputy Governor Andrew Large concluded that RBS has not supported the SME sector in a way that meets its own targets or the expectations of its customers. It says that while RBS has started to address a number of the issues raised, further progress is needed.

The report identified a number of reasons for RBS failing to hit its lending targets, including:

RBS’s SME lending targets were at odds with its tougher credit standards, and the limits imposed on lending to certain sectors, for example lending to commercial real estate
Internal restructuring had led to lack of clarity as to which part of the bank was responsible for SME lending
There is a ‘risk adverse’ culture amongst its Managers and Credit Officers
The bank’s lending process is time consuming and loan applications take longer than at other banks
Credit skills of customer-facing staff, although improving, are not up to standard

Having an independent committee pull apart your business and highlighting areas of weakness is a tough message to take but RBS CEO Ross McEwan has accepted the findings and recommendations and has committed to take action. Looking at the findings I suspect that other High Street banks are guilty of many of these sins.

McEwan has committed RBS to the following key actions amongst others:

The bank will write to thousands more SMEs setting out clearly how much it is willing to lend to their business. It has already offered £4 billion of lending opportunities following a similar exercise earlier this year;
A dedicated website will be developed to show clearly what information RBS use to make a lending decision and set out simple, clear steps in its lending process;
The bank will begin work to enable bankers to make all but the most complex lending decisions in just five days of receipt of all necessary information;
RBS will ensure two thirds of its lending decisions are made locally and by sector specialists;
RBS will continue to invest in building the capability of its people with at least 90% of Relationship Managers and Credit Managers professionally qualified;
RBS will start a programme to make all customers whose loan applications are declined aware of the appeals process, and will continue to work with the Independent Appeals Chair to improve the support it provides to customers going though this process; and,
The bank will commit to pointing businesses to alternative sources of finance where it cannot support a loan application.

This is a big undertaking and RBS will on an annual basis publicly report on progress against these commitments. It will be interesting to see how they fare in addressing these issues given the mammoth task ahead of them.