Banks treat small firms better as fewer loan rejections overturned

 
Tim Wallace
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Small businesses are hoping to take advantage of economic growth, with better finance
BANKS have cleaned up their act and are treating small businesses increasingly well, SME loan monitor professor Russel Griggs said today.

When the appeals service was set up in 2011, almost 40 per cent of complaints were upheld and the loan rejection reversed.

In this financial year so far the rate is just 20.8 per cent, indicating banks are making better decisions.

The improvement in the rate comes despite a rise in the number of appeals – from 2,177 in 2011 to 2,810 in the first nine months of 2014 – due to increasing awareness among SMEs of the scheme.

Griggs believes banks are assessing applications more thoroughly now, and have more transparent processes in place.

And banks are having “better conversations with those SMEs that are declined that allows them to understand better what they need to do to have an application accepted which has in some cases prompted them to come back at a later date with a successful application,” Griggs said.

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