At last the Government is thinking of legislating to force banks to refer businesses they have rejected for loans to third parties.  An obvious body to receive those referrals is the National Association of Commercial Finance Brokers, of which I am a member.

NACFB asked its members to report what percentage of our business came from bank referrals and what our success rate was with them.  The answer was 1% of our business and 100% success rate.

The trouble is that customers don’t know there are so many alternative lenders and of those applicants who do most have been exhausted by the bank’s processing before the rejection.

As a result, businesses which should and could thrive with extra funding don’t.  One blindingly obvious example is residential housing development.  High Street banks have been extremely wary of supporting smaller builders and developers for at least six years (some of us would say longer) and we now have a housing shortage.  What a surprise!  There is plenty of funding available for house builders: they just need to be pointed in the right direction.

And please don’t fall for the banks’ spin doctors’  “we approve 80% of all loan applications”.  As I have said before, this is a complete distortion of the facts.