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Friday
Apr082011

Banks to allow small business loan appeals

British banks will allow small businesses that have loan applications rejected to appeal against the decision, according to the British Bankers’ Association.

Currently small business owners find little recourse if their loan application is rejected. Under the proposals businesses with fewer than 10 employees will be able to appeal to a more senior bank staff member to review their failed loan application.

Small business owners may be sceptical of the value of such a system given that the power to grant loans will remain with the bank. There is a fair amount of controversy within the process at the moment with small businesses claiming that loans are proving hard to get from banks hoarding money to bolster their reserves to meet new banking guidelines. Banks on the other hand claim that businesses are simply not applying for loans.

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