Frequently asked questions
Through BetterBusinessFinance.co.uk we want to help businesses by providing straight answers to some of your most frequently asked questions:
- My application for a loan has been declined, how can I appeal?
Each bank has its own appeals process, so the way in which you launch an appeal will differ depending on your bank. If your application is declined your bank will write to you giving you the details of their appeals process. It will not launch automatically so it is up to you to generate an appeal if you feel you have been declined unfairly.
You can start your appeal here.
You can find out more information here
- When can I appeal?
An appeal can be made after any formal request for lending has been declined – this means any application that has gone through a credit assessment, after the bank has received all the relevant information from you to make a decision.
If you have not made a formal application, but have simply had an initial conversation where your bank has indicated an application will not be successful, an appeal cannot be launched. However, as part of this discussion the bank will explain to you why you are unlikely to succeed in your application, work with you to reshape the request if possible and give guidance on alternative sources of finance if appropriate.
- My bank has always said I could appeal decisions, what is this new appeals process all about?
In October 2010 Britain’s biggest banks committed to launch a new, transparent appeals process for SMEs. Each bank will still implement their own process but it will now meet a set of commonly agreed principles. These principles mean that, when an appeal is raised, the decision will be reviewed by a second person from within the bank who was not involved in the original decision. They will consider all the information originally provided and ask for more where they think it is necessary. The result of the appeal will be communicated to you in writing within 30 days. If lending is still declined, the bank will provide information on alternative sources of finance that may be more appropriate or provide support in another form, such as putting you in touch with a business mentor.
- Is the appeals process monitored?
Banks’ adherence to the new principles will be monitored by an Independent Reviewer, Professor Russel Griggs – an external figure appointed to scrutinize the appeals process. He will produce an annual report on the overall effectiveness of the banks’ appeals process and will be supported by an independent Operational Review Team from the consultancy, Promontory. Promontory will conduct on-site and off-site monitoring of the banks’ appeal process throughout the year, as determined by Professor Griggs and work with him in preparing the Annual Report.
The annual findings report will be shared with the banks, government and various stakeholders.
- What power does the Independent Reviewer have? Can he review my appeal?
The Reviewer will conduct a detailed examination of each bank’s appeals process against the agreed principles and publish the results as part of his annual review. He will not review or overturn individual lending decisions.
- Where can I find out more about the Business Growth Fund?
The Business Growth Fund is a £2.5bn equity investment capital fund backed by five of the UK’s largest banks – Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered. If you are interested in finding out further information on the funding opportunities available, visit http://www.businessgrowthfund.co.uk/
- What support would a mentor provide to my business?
Research shows that businesses which seek guidance and support, particularly during start up and their first months of trading, are most likely to survive and succeed. It can be a lonely place stepping out on you own for the first time or running an existing business day to day – that’s where a mentor’s help and support can be invaluable.
A mentor is normally someone who has extensive business experience or is knowledgeable in a particular business area, such as finance, and who acts as a trusted confidante over a flexible period of time.
The trained mentors will support businesses through all sorts of phases and stages, from start-ups needing a hand with developing their business plans to those looking to expand, by simply acting as a sounding board for ideas.
- How do I become a business mentor?
If you are interested in becoming a business mentor and think you have the necessary skills, visit the ‘Become a mentor’ page on http://www.mentorsme.co.uk Here .you will find the job description and the dos and don’ts checklist for being a mentor, as well as the process for applying.
- I am interested in having a mentor, how do I apply for one?
If you believe that your business would benefit from a mentor, visit our information portal – http://www.mentorsme.co.uk Here .you will be able to locate your local mentoring organisation, as well as the groups the trained bank mentors are working with. Once you have found your local mentoring organisation, get in touch with them directly and they will then work with you to find the right mentor for you.
- How do I prepare for re-financing?
Preparing well in advance for the re-financing of a loan will help both you and your bank. Britain’s five biggest banks have committed to contact customers for a discussion about refinancing at least 12 months before loans are due for review or repayment.
Before the re-financing review begins your bank will provide you with a comprehensive checklist of the information lenders will need in order to undertake the review. The Better Business Finance banks are also helping customers in other ways such as providing helpful information on how to develop and review business plans writing a business plan, how to prepare cashflow forecasts and by providing information on the factors affecting loan pricing.
- What can I do if I have been refused lending?
No bank makes the decision to turn down lending lightly. But, if you have been refused a loan for any reason there are a number of steps that you can take:
- Seek support from a Business Mentor: experienced Business Mentors can give you information about your options and work with you to improve your chances of securing the finances you need, from your bank or elsewhere, in the future. You can find out more about what support a business mentor could provide you by visiting – http://www.mentorsme.co.uk .
- Consider alternative sources of finance: a loan from your bank is just one way of accessing the funding you need and won’t be the right approach for every business. If you are refused a loan your bank will help you consider alternative sources of finance that may be more appropriate. You can find more information about some of the options available here.
- Appeal: If you feel that the decision to refuse finance was unfair and did not meet the lending guidelines and standards then you have the right to ask the bank to review the decision. Your application will then be re-assessed and the reviewer will report back to you within 30 calendar days of you making the appeal. More information about the new appeals process can be found here.
- How can I get help applying for funding?
If you are looking for assistance to work out which funding options are best for you or would like support with an application for a loan there are a number of places you can go for help.
Local bank: Your local bank should be your first port of call for information. The bank’s local business adviser has been specially trained to provide information about the funding options that would suit your circumstances and the products and services available to business customers.
Business Mentors: Through a dedicated business mentoring scheme, businesses across the country can speak to experienced Business Mentors to get help and support on all aspects of starting and running their business. Some pilot schemes are already in operation with others being rolled out across the country throughout 2011. You can find out more about what support a business mentor could provide you by visiting – http://www.mentorsme.co.uk.
Helpline: BetterBusinessFinance.co.uk has set up a dedicated helpline to point you in the direction of the information and support you need. Please call us on 020 7216 8877.
- What funding options are available?
Depending on the size of your business and your financial requirements, there will be different funding options available. We have produced a series of factsheets to explain the benefits of some of the most popular sources of finance:
- Asset Finance
- EIB Funding
- EFG Funding
- Export Enterprise Finance Guarantee Scheme (EXEFG)
- Supplier Payments
- Trade Finance
- Invoice Finance
- Business Angels
- Prince’s Trust Enterprise Programme
- Community Development Finance Association (CDFA)
In addition to these alternative sources of funding, Britain’s biggest banks are coming together to establish a new Business Growth Fund (BGF). The BGF will invest over £2.5 billion to help dynamic and growing medium sized UK businesses whose turnover is typically between £10 million and £100 million per annum. The investment is provided in the form of equity capital and complemented by loans and trade finance offered by banks.
You can find out more information at the BGF website: http://www.businessgrowthfund.co.uk/
If you would like to speak to someone directly about the best funding options for you, contact your local bank. Information about how to find a local Business Mentor will be available here soon.