British Bankers’ Association aims to direct entrepreneurs back to their bank managers with new marketing strategy
We may have speculated recently about the reluctance of small businesses to borrow from financial institutions – with the latest Bank of England figures suggesting net lending to businesses fell by £4.3bn between September and November 2013 – but it appears measures are being taken to redress this imbalance, according to the British Bankers’ Association (BBA).
As it launches a one-year marketing movement designed to target SMEs with a turnover of less than £25m, the BBA reports that the willingness of banks to lend is perhaps more than at first envisioned. Whilst only 37% of small businesses believe they will get approval from their bank for funding their burgeoning enterprise, the BBA has found that more than two thirds have their loan applications approved, with banks having made £11.5bn worth of new loans in the past three months, a 27% increase on the previous quarter.
BBA chief executive Anthony Brown spoke confidently about this new campaign, and its suggestion that more help is at hand for entrepreneurs and their efficacious initiatives.
“We’ve launched this campaign to let businesses know that they are a lot more likely to get finance than they think,” he said.
The new campaign aims to increase buoyancy about bank lending amongst these smaller businesses, with the belief that increased loans could boost the growth potential of up to 270,000 companies. It will be run in conjunction with the British Business Bank, launching this year with £1bn of capital at its disposal, which it is believed could help drive more lending to businesses.
Brown concluded: “Small businesses are the engine room of the economy and the research we publish today shows how much stronger our recovery could be if more SMEs approached their banks for finance.”
We wait with baited breath to see if these businesses take a leaf out of Brown's book or not.