Blundering banks: The research that shows businesses are being failed

Nearly half of SME owners claim the advice they received in the last year from their bank had a negative impact on their business operations.

Nearly half (47 per cent) of small and medium-sized business (SME) owners claim the business advice they received in the last year from their mainstream bank had a negative impact on their business operations and one in six (16 per cent) of these suggest their business is now in a worse position as a result.

This is according to a new study by Amicus Commercial Finance, the specialist lender of flexible working capital to SMEs, which also highlights that more than half (52 per cent) of SME owners ignored advice they received from their mainstream bank over the last 12 months.

The research shows that four in ten (40 per cent) of SME owners do not rate the level of service they receive from their mainstream bank as ‘good’.

SME owners in the West Midlands (53 per cent) and North West (53 per cent) are the most disappointed in the level of service while half (50 per cent) of SME owners in the IT and communications industry do not rate the service as ‘good’.

The survey shows that, of those who have used the bank to help them support their business with working capital or overdraft facilities, nearly a third (30 per cent) wouldn’t describe the bank as ‘helpful’ and nearly half (46 per cent) of SME owners suggest they wouldn’t describe them as ‘flexible’.

Regionally, two in three (65 per cent) SME owners in the West Midlands suggest that they wouldn’t describe their mainstream bank as ‘helpful’ with working capital or overdraft facility support. Eastern (57 per cent) and South Western (57 per cent) SME owners say they wouldn’t describe the bank’s advice as ‘helpful’.

More than three in five (63 per cent) of business owners in Yorkshire wouldn’t describe the help from their mainstream bank as ‘flexible’, compared to 57 per cent in the West Midlands and 53 per cent in Wales.

The research also looks at the lack of human interaction available for SME owners when looking for working capital or overdraft facility support. Indeed the three most commonly associated grievances of dealing with a bank through a call centre are that they are time consuming (22 per cent), frustrating (17 per cent) and complicated (10 per cent).

John Wilde, managing director of Amicus Commercial Finance says, ‘The research shows a worrying trend of business advice from mainstream banks been rejected or taken on board with negative consequences for SMEs.

‘There is a growing divide between the level of business service and the flexibility required by business owners and the advice being offered by mainstream banks. As working capital and cash flow are by their very nature dynamic, most traditional mainstream systems have failed to keep pace over the last few years.’

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