One thing – banks and small firms...

If I ruled the world... well, maybe just some small parts of it, I’d be looking at ways to help small companies grow.  As one repeated complaint in the press and from small firms themselves is that the relationship between banks and small firms doesn’t encourage growth, the one thing I would do would be to fix this. 

I’d start by ensuring that small firms owners had robust growth plans to support their request and that bank advisors spent time in small firms and participated in training to better understand the context for business potential and growth.  This would also involve more long term understanding of companies. 

I say this as someone who works with a large circle of small firms, hearing day after day some of their views on banks.  When an owner has banked with an institution for 15-20 years and has a good credit record, they see this as a good long term relationship.  It appears, though, that this is not the bank's perspective as asking for a loan in the current climate often means being shunted from one remote section to another, with some reports of aggressive behaviour on the bank's part.  The ‘relationship’ side of banking gone in an instant.  Traditionally UK small firms are very loyal and long term customers for banks.  Maybe the other side of educating them for growth is to encourage them to be more selective and to change their banks if their current institution does not provide the right service.

Would this work?  You tell me...  Comments or blog entries to Laura Rimmer on l.rimmer@mmu.ac.uk