BBI goes live to improve access to finance for SMEs

Friday 30 May 2014

Access to finance for small and medium-sized enterprises (SMEs) and those setting up a business has long been a challenge in the UK. The country's big banks have been reluctant to lend to SMEs since the recession, despite government policies designed to change this. However, a new website is hoping to change this.

Business Banking Insight (BBI) has gone live and will look at how well British SMEs are being served by banks.

Chancellor George Osborne commissioned the site, with the aim of helping businesses make better informed banking decisions.

It will publicly showcase the experiences of more than 5,000 businesses and how they rate their banks.

It is hoped this will help to improve trust and transparency between financial institutions and SMEs.

Research was carried out by the independent market research agency ICM and the programme is backed by the Federation of Small Businesses, the British Chambers of Commerce, HM Treasury, the British Bankers Association, the Royal Bank of Scotland, the Department for Business, Innovation and Skills and the Competition and Markets Authority.

BBI gives clear insight into how lending can be improved, with 74 bank brands ranked through a combination of percentages and 5-star rating systems.

Three different business sizes were interviewed for the site: sole traders, companies with one to nine employees, and businesses with between ten and 249 members of staff.

Customer satisfaction levels are based around the five criteria of transparency, tailored services, value, availability and keeping customers informed.

Among sole traders, the average level of satisfaction with banks is 60 per cent. This group were found to be more likely than larger businesses to give a five-star rating to a lender based on responsiveness, transparency and value for money.

Unsurprisingly, over half of banks received a three-star rating or below when it came to credit approachability.

Mr Osborne said: "I welcome the first set of results from the new Business Banking Insight survey, which I commissioned to provide Britain’s small and medium-sized businesses with a clear and credible way to judge how their bank compares to its competitors.

"A key part of our long term economic plan is increasing competition and choice in banking, and ensuring Britain’s SMEs get the best possible service from their bank. This new survey will be a powerful tool for these businesses, providing them with the means to see who’s up for the challenge and who isn’t."

Among businesses with one to nine employees, the average current account satisfaction rate was 60 per cent, compared to 65 per cent for companies with between ten and 249 workers.

The former was found to want more tailored services but struggled to access them and value for money was proving to be difficult.

This was mirrored among companies with ten to 249 employees, who did not give a five-star rating to any bank for value. This group did, however, experience better credit approachability, with 17 out of 21 banks receiving a 3.5-star rating or above.

By Victoria McDonnell

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