While net lending to SMEs under Funding for Lending fell by £723 million, Rich Wagner founder and CEO Advanced Payment Solutions feels that the battle to be granted a business bank in the first place largely goes unnoticed. Many would-be business owners are denied the opportunity to open a business bank account – before they’ve even had a chance to think about lending!
“Funding for Lending figures from the Bank of England released today show that net lending to SMEs under this scheme fell by £723 million in the first quarter of the year. The SME Finance Monitor also points to a rocky relationship between small businesses and the banking titans.
“We see these sorts of statistics over and over again – surely there is no escaping the fact that traditional banking services simply aren’t geared towards SMEs.
“The problem is actually much simpler, deeper-rooted and more concerning. There’s a number that doesn’t make the headlines so often – the percentage of small businesses that are denied even basic banking services (such as a current account), because they don’t qualify for credit. Why? Because if banks can’t figure out a way to make an SME customer profitable, they don’t even want the business in the first place. Despite a stream of fashionable rhetoric around SMEs being the ‘engines of economic recovery’, it seems the fuel is tainted by bank greed, serving their own needs before those of their customer, with inflexible requirements and offerings. It’s no wonder we have run into a culture of banking discontent.”
Richard Wagner is the founder and CEO of APS, a payment solutions company, which enables small business owners and would-be entrepreneurs to open a business account online in minutes, regardless of credit score. Richard, who was previously a director at Barclaycard UK and a vice president at Visa, has first-hand experience of the challenges of business banking. Extensive checks and business account refusals meant Richard struggled for nine months to secure the business account required to start APS.