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Appeals Process encourages better bank conversations for small businesses

Professor Russel Griggs, Independent External Reviewer of the Appeals Process

In my role as Independent External Reviewer of the Appeals Process, I am often asked whether I think the appeals scheme is really improving how small businesses access the right finance.

For me, the impact of the process was summed up by a bank Relationship Manager, who I met at a meeting with a Scottish Government Minister earlier this year.

When asked how well the scheme is working, the Relationship Manager said he felt the real benefit was how it enabled him to have a better conversation with his customers. This in turn created a better customer relationship, leading to a better lending environment. He believed this would help his customers to gain funding either in the short, medium or long term, and that it was just as true for when they were being declined for lending and appealing the decision as for when their application was accepted.

To me that conversation shows the real benefit of the Appeals Process.

In my third Annual Report on the process, released today, I discuss how my focus is on continuing to make that conversation better. I want to make sure lenders and others have the right people and processes to make that happen, and that SMEs understand they also have a part to play in improving the conversation too.

Over 9,000 appeals have been made in the three years I have been reviewing the Appeals Process, securing over £42 million of additional lending for small businesses. Awareness of the process continues to rise, and the announcement that lenders TSB and Clydesdale Bank (including its Yorkshire Bank) will soon join the scheme means the option to appeal will be available to almost all applicants.

So the Appeals Process is clearly having a major impact on all lenders, and on their customers. Every bank involved has changed something about their lending processes based on our recommendations that will benefit both them and the businesses that apply to
them for finance. My priorities for the coming year will be to ensure all banks can tell their customers clearly and precisely why they were declined for lending and what they might be able to do to change that decision over time, hopefully creating a healthier lending environment and more sustainable businesses for the future.