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More businesses make use of the Independent Appeals Process

If you have been turned down for a bank loan, you can appeal that decision through the independent Appeals Process. Professor Russel Griggs is the Independent External Reviewer tasked with overseeing ways in which the process can be improved and ensure greater transparency between the bank and you, the business.

Professor Griggs has today published his latest quarterly report (October to December 2013) and notes that more businesses are taking the opportunity to launch an appeal with their banks when they are turned down for bank finance. His report also found that the overturn rate is also declining, which suggests that the procedures within banks are getting better.

Appeals Process opens up communication channels between you and your bank

In his role, Professor Griggs regularly meets with banks to understand their processes when it comes to lending to businesses. He found that banks believe that the Appeals Process is a useful way to better understand their customers’ needs and the reasons why they require bank finance in the first place. They can therefore guide their customers on the best way to improve their application or identify a different form of finance more suited to their needs. Professor Griggs also emphasised that banks are not concerned if customers appeal and do not see an overturned decision as something that would count against them.

A failed credit score is the main reason for a decline

A failed credit score is the main reason why a bank would decline a loan – 40% of all lending in the past year was down to this reason. What is not widely known is that your personal credit score can affect the banks’ decision to provide you with business finance. This is particularly true if you are a start-up and only require a small amount of credit – your personal credit score will be judged first instead of your business.

The good news is, there are simple ways in which you can improve your credit score before you apply for bank finance. For more information on how to improve your credit score read our guide here.