“As noted by Vince Cable, relationships between businesses and banks have come under tremendous strain during the recession. In the past, business owners often had local relationships with branch bank managers, now many businesses are faced with banks’ over-centralised decision-making and a lack of transparency about lending decisions. This poor relationship management, coupled with the continued economic uncertainty, deters many businesses from applying for finance.
“Restoring trust between businesses and banks relies on more than just meeting lending targets. Banks should reconsider how they communicate with business customers, and be able to make decisions at a local level about their financing needs. This transparency and local support goes hand in hand with the availability of finance. Without clear lending processes and more sensible decision-making at a local level, many businesses will still be reluctant to ask for loans and big net lending targets won't be met."
“Businesses should be able to access finance from different providers, and our banking system has to deliver an environment that encourages competition between lenders. On its part, the government must create an environment that delivers confidence to our businesses, helping them to invest, grow, and create jobs.”