OK, lets be real. Did anyone out there ….I mean ANYONE ANYWHERE expect the banks to hit this target?? If they did they must be living in lala land. The banks say they “only” missed their SME lending targets by 1.1 billion. Oh – well thats OK then!!
Can you imagine what that 1.1 bill could have done for SME’s??
Plus – that is not the whole story. Because of the economic uncertainty and the fact that they know they will likely be turned down, far fewer SME’s are even bothering to apply for loans. Many small businesses – this one included – have self financed through cashing in policies, loans from family or credit cards.
Now – don’t get me wrong, the access to finance of 5 years ago was no doubt too easy, and banks were loaning where they had no right to loan. But there is now without doubt the opposite problem. Businesses that have a stable track record and a solid plan cannot get finance because one tick in one box is not there.
In the good old days when bank managers were actually able to make lending decisions and it didn’t have to go to someone who has never spoken to that business and is only interested in ticking boxes, a sensible commercially aware bank manager who knew the businesses in his or her portfolio, was able to make a sensible commercially aware decision to lend to a business he or she believed in.
Here’s a radical thought. Lets bring that back.
Lets allow bank managers who know their clients the authority to make a decision to lend a small business what is – to the bank – a pittance, but an amount that could make an enormous difference to a business and would mean they don’t have to cash in policies they have saved 20 years for, 12 months before they are due to mature, thereby losing 25% of the policy value. Yes – I am talking about a real example – one of thousands according to the Forum of Private Business.
As always – if you can prove you don’t need the money, any amount of banks will lend it to you. Also, if you need a few mill – you’ll be more likely to get it then if you need a few grand.
Anybody out there fancy starting a bank with me, cos I’m sure we could do a better job?
Failing that – it’s time for the government to intervene and make banks hit these targets. Well, thats if they are actually serious about economic recovery.