ASC Finance for Business

AAA or Double Dutch - Take 2

2012-03-01T10:31:00.000Z

I am sure all of you read in the press about the “downgrading of the Credit Rating from AAA” for the UK by some of the rating agencies. I still haven’t figured out what this really means because the last time I investigated I found out that when the United States was downgraded their interest rates actually dropped (in other words it was a benefit to the USA).

However, what I wanted to discuss is the question…who are the people behind the rating agencies (Standard & Poor, Fitch, Moodys etc)? Are these the same guys who a few years ago gave positive gradings to the Greek Government or to the various firms which packaged up self-certificate loans? Are these the same guys who only a few years ago arranged ratings for Northern Rock or AIG or RBS? Well, we all know how good the rating analysis was but what we don’t know is whether the same guys are still doing the same job – I hope for all of us they are not, otherwise I would suggest that we ask XXX to deal with all this AAA.

By Henry Ejdelbaum

Good News or Bad News – High Street Closure Rates

2012-02-23T13:54:00.002Z

Another set of “de-motivating” statistics have been released. Apparently Britain’s high streets are losing 14 stores a day as retailers struggle.

Of course this is bad news but like everything in business there is positive news on the other side of the coin. Now is a brilliant time to start a retail business because landlords will be extremely flexible and keen to offer advantageous terms. There are many businesses that still require a retail presence: hairdressers, nail bars, coffee shops, restaurants, to name a few. There are many other businesses which require a “property presence” and cannot be run via the internet, for example: children’s nurseries, physiotherapists, car repairs to name a few more. Some of those businesses enjoy good trading prospects despite the doom and gloom. So if you have an idea talk to professional advisors and find out if it is a viable idea. Many professional advisors – ASC included – are happy to hold the initial meeting without any obligations which offers you the opportunity to find out how to take matters further.

By Henry Ejdelbaum

£1 Trillion Debt – Where has the money gone?

2012-02-16T12:12:00.000Z

So we all know now that the United Kingdom has a national debt of £1 trillion – whatever that means because I am sure you will agree with me that this really is “talking telephone numbers”.

OK. I can live with the debt and I can try to understand the figure. What I cannot figure out though is where the money went. Most of our clients borrow money for a specific purpose so if a client borrows £1 million to develop a hotel he or she will know where the money has gone once they are starting to re-pay the mortgage. Do we know what happened to our £1 trillion debt?

Where has the money gone? If we can see where the money has gone at least we can start to understand whether there was a benefit. I have a suspicion that a more detailed analysis will show that a lot of this debt has been used to fund expenditure and not to fund investment. That is really a political question which is outside my remit. I just want to contribute with my question to help us understand and perhaps to help avoid similar problems in the future.

By Henry Ejdelbaum

George Osborne’s Advice: Hamster food for China!

2012-02-09T13:38:00.000Z

The other day I spent an evening with about 250 business people, real business people – a pet shop owner, an insurance broker, a telecoms broker, a property developer and so on. During the evening we listened to a speech by the Chancellor. After the obligatory talk about the various tax changes, budget constraints and all the other initiatives introduced by the government he went on to explain his vision for growth. It was ever so simple. He referred to the emerging markets such as Asia and the East and that doing business with the emerging countries will be the solution. Somehow it felt as though the speech was addressed to another audience and that it had been given before. I totally agree that Asia offers fantastic opportunities - for large companies which have an export focus, but the audience catered for the UK market (in fact for most of them the focus was “local” rather than “national”). Was the Chancellor really suggesting, that a pet shop owner should try to sell hamster food to China or that the local insurance broker try to sell car insurance to Malaysia.?

Anyhow, rather than being just critical let me float some ideas which might help small businesses to grow. Find out what your clients really want by talking and speaking to your clients as often as you possibly can and then adjust your product and services accordingly. Engage in intelligent marketing in your local area, provide extra service like free delivery or increased opening hours. Seek help in those areas where you do not have expertise. Yes some of it involves costs and some of it involves more hard work. But after analysing many business plans for our clients we see that there is a real appetite for starting and building businesses. There are business people who see the opportunities and who are focussed on taking advantage of them. It could be a nail bar chain or a cookery school for African food, an on line print business or a smartphone application studio, a local cafe or a boutique hotel – there are innumerable success stories out there.

Henry Ejdelbaum

Are Bridging Loans a Good Tool for Business Finance?

2012-02-02T12:19:00.000Z

The number of bridging loan providers has increased sharply and published statistics suggest that there has been an increase of 27% in the number of bridging loans taken out in the past twelve months. My question: is - is this necessarily good news?

By their very nature bridging loans are more expensive and provide lower loan to value ratios; the key feature of bridging loans is of course that there has to be a clear “exit strategy” in place, in other words both the borrower and the lender need to know exactly how the bridging loan is being repaid. If the idea of the bridging loan is only to renew the bridging facility again and again then it is a pretty expensive way of arranging business finance. On the other hand, bridging loans can be very flexible and very often there are fewer underwriting hurdles to jump. So clearly there is a market for this sort of finance. Is the market expansion a function of real demand or is the explanation merely that very often bridging loans are used because the traditional business finance providers apply very restrictive underwriting criteria.

So let me make it clear that I’m not against bridging loans per se. I am just raising the point that it appears that bridging loans may be used more often than necessary where other sources of finance would be more suitable.

I’d be keen to learn of any situations where you believe that bridging loans were arranged incorrectly.

Henry Ejdelbaum

The Bank of England looks after small businesses

2012-01-26T11:15:00.002Z

The Bank of England looks after small business…or so we are allowed to believe. However, let’s have a look at the bank’s financial policy committee and who sits on it. If you look at the CVs of the members you will be impressed. They are all successful, intelligent and decent people. However, they have one common denominator; they have no experience whatsoever relating to the establishment, operation and development of a small business. I am sure you’ll agree that specific experience in a specific field (ideally accompanied by a successful track record) might be more useful for small businesses.

Henry Ejdelbaum

Risk – Regulation – Common Sense – who is winning? - From ASC Finance for Business

2012-01-19T11:37:00.000Z

Clearly common sense has lost. I think a lot is due to the increasing demand of regulation. Let’s look at mortgages or business loans. Obviously there is a risk for the borrower and for the lender. But it seems that regulation treats everything the same. A first time buyer who is looking for a £100,000 representing 80% of the value is clearly taking a different risk than a millionaire business person who wants to borrow £1 million on a £5 million value. Clearly the borrowers are taking different risks and the lenders have to use a different risk analysis. But we all know, this is not what is happening, and clearly we need a different regulation for each scenario. However if we need different regulations for each scenario then regulation will increase out of proportion (one could actually say that is has already happened).

And this is why I want to come back to common sense. If borrowers and lenders both apply common sense then there would have been much fewer self-certificate mortgages, buy to let mortgages, unsustainable business overdrafts, over geared development transactions etc. In other words regulation does not take away the need for common sense.

Henry Ejdelbaum

The reality of Government Initiatives - From ASC Finance for Business

2012-01-12T10:02:00.000Z

A little while ago I wrote about the tsunami of initiatives by the Government and suggested that rather than creating more “flagship” ideas the Government should focus on creating conditions to increase confidence.

The other day I received an update on the “Homeowners Mortgage Support Scheme” which was introduced by the last Government in 2009. The scheme closed to new registrations in April but not because it was successful. Originally it was suggested that this scheme would help 9,000 borrowers but at the end there were only 60 registrations – (hold on - the housing minister has just confirmed that “to date no payments have been made”).

If you have any ideas how the Government can create conditions to help businesses to operate and develop their business then please let me know and I am happy to publish it.

Henry Ejdelbaum

Guess who is dispensing an array of marketing advice? From ASC Finance for Business

2012-01-04T10:53:00.000Z

I received the following mailshot the other day – I am just quoting some sentences which I found fascinating:

‘Following the economic crisis….customers want to enjoy a meaningful relationship with the companies they choose to engage with.’

‘Businesses of all sizes can benefit from using technology as a way of making customers feel valued.’

‘I strongly believe that today’s consumers value honesty above all else….it’s about mutual respect.’

‘Trust, loyalty and empathy matter to your customers and ultimately to your success.’

Now I will let you have three guesses which industry the mailshot is coming from:

1. Second hand car salesman

2. Business banker

3. Life assurance salesman

I think you can guess who published the above. I just love it when I receive such emails which are so removed from the truth. Based on our experience I can only suggest that deeds speak louder than words. Trust has to be earned - one has to deliver first and then write later. Writing first when the track record confirms that you don’t deliver does not endear you to today’s modern customer – and by the way this is a bank which publishes, for example, lending criteria of up to 70-75% for an investment property, but when applying, their internal & unpublished criteria you normally won’t be able to obtain more than 50%!

I’d love to hear your opinion.

Henry Ejdelbaum

Marketing advice from a bank manager

2011-12-19T10:46:00.000Z

I got a leaflet the other day from a famous bank where the Executive Director (sic) is dispensing his advice. He suggested that “businesses of all sizes can benefit from using technology as a way of making customers feel valued, such as using new media as a way of responding promptly….”. I wonder if this senior executive has heard about the story of Rachel Brown. Mrs Brown is running a small business making cupcakes. She got suckered in to doing a voucher scheme with one of the new media companies. The idea was to discount her normal price and sell via the voucher scheme. The problem was that the scheme was successful and about 100,000 cupcake orders came in. In order to fulfil the orders Mrs Brown had to employ more staff. The problem then was that the price of the voucher scheme for a dozen cupcakes was agreed at £6.50 with £4.00 going to the voucher/online company for their marketing efforts. The result was obvious; the margin was too thin to cover the additional expense. Our enterprising business woman lost an awful lot of money. I wonder whether her bank manager considered all the implications before dispensing marketing advice?

Did you receive any business advice from a bank manager which turned out to be a little absurd? Please let me know.

Henry Ejdelbaum

Bank of England v Treasury - From ASC Finance for Business

2011-12-12T10:18:00.000Z

You got to love it when our learned leaders contradict each other in public. The battle ground this time is house ownership. The Bank of England calls for less owner occupation and the Treasury has announced a few days ago (a few weeks ago) that they would be spending £400 million (sic!) to kick start house building in the private sector. In addition, they want to introduce a mortgage indemnity scheme.
So who is right?

Bear in mind that in recent years there has been an increase in private sector rental because people cannot afford to buy - but rents are now so high that there is now a question of affordability.

So, is property development not a simple question of supply and demand? But then who controls supply - If it was house builders there is no question they would increase the supply to meet the demand but I think the big problem is our planning laws which restrict the supply of land for house building. There are loads of unused Brownfield sites as well as other unused sites nationwide, but go and try to get planning permission to build some residential units. The reason why there is such a low supply is simply because the cost of acquiring a property with planning permission is approximately 35% of the end value. This is clearly something to be done by the Government rather than arguing with the Bank of England.

In addition if you decide to build a development will you be able to get the finance? The simple answer is no you won’t. This is because most banks are so risk averse that they will not support a development scheme. So again there is food for thought for the Bank of England – provide conditions that lenders will be able to provide sensible finance for property development.

Henry Ejdelbaum

If you love red tape…You’ll love the new National Loan Guarantee Scheme

2011-12-05T14:57:00.002Z

After reading about the new ‘National Loan Guarantee Scheme’ courtesy of George Osborne - I breathe a sigh of frustration. Not only is this set to follow in the footsteps of previous schemes which became failed initiatives it is a boost to the red tape industry!

No doubt it will be another scheme to join the tsunami of failed initiatives. Just ask yourself, what happened to the Enterprise Finance Guarantee Scheme – why is there such a slow uptake? What happened to the Enterprise Capital Funds? Local Enterprise Partnerships? Project Merlin? The list is endless and it all seems to be entangled in red tape.

It’s baffling how they can’t learn from the past - rolling off one initiative after another clearly isn’t working. With the excessive amount of administration required time and extra costs businesses are unable to spend time jumping through hoops and run their business at the same time? We have even had a bank manager tell us that with the amount of administration involved when applying for these schemes - he doesn’t want to do it.

Businesses need a solution to help them stay afloat in this climate and the government’s scheme of underwriting the loans is far from the best way.

Henry Ejdelbaum

Money Laundering Regulation Going Mad

2011-11-28T11:04:00.004Z

Here’s a real experience from one of our clients.

A father guaranteed his daughter’s mortgage. He was already the client of the bank concerned. The bank insisted that the daughter receive independent legal advice – fair enough. So, in the first instance the bank carried out its anti-money laundering procedures for the daughter. Then the solicitors acting for the bank decided to carry out their anti-money laundering procedures for the daughter. If that appears to be a little bit over pedantic, wait. The bank’s solicitor then decided to carry out their anti-money laundering procedures for the father although he was already a client of the bank.

Now I am not against anti-money laundering procedures, I think in principle they are a useful tool in the fight against financial crime but I am wondering how much time and effort is wasted in the economy because people apply these rules without thinking. I also wonder if the Russian oligarchs who are buying big properties and businesses in the UK had to undergo the same procedures (can you imagine Abramovich being asked for his driving licence and a utility bill when he bought Chelsea Football Club?).

Henry Ejdelbaum

Mirror Mirror on the wall – who’s the best risk advisor of them all (RBS?) - From ASC Finance for Business

2011-11-21T15:17:00.001Z

We all know about the RBS story – what happened and why it happened. Fair enough in a way that’s history and RBS is in good company with the other banks. I do like their marketing though. If you read their marketing you believe the world is in order and RBS is the saviour of small businesses. I can stomach this to a degree because I know they are trying to get more business in.

Where it gets absurd is when RBS is spending money to publish their credentials as “Advisors for Innovation and Managing Risk”. I am not kidding . In their glossy magazine called ‘In Focus’ which appears in Management Today, RBS is stressing its virtues in managing risk. I just have a simple question - who would want to take advice from RBS about risk management? I don’t think their track record is an endorsement and I wonder if they should focus on different areas of marketing.

What do you think?

Are Bankers bonkers (or are we bonkers?) - From ASC Finance for Business

2011-11-14T10:53:00.000Z

Today I read that banks profits are currently rising because of "Fair Value Accounting of Own Debt". I immediately sense that this has nothing to do with good lending or customer service.

I think I understand this as follows. Banks have their own debt, but if the markets think they are a bit shaky, the value of that debt decreases and can be bought in the market for less than the issued value; in other words banks have to pay less to buy back their debt. That means they will spend less and their profits might go up. It’s hypothetical – but they can do this valuation and run it through their accounts. So that means the worse a bank does, the lower the value of their bonds, the higher their potential profit. There is only one word for this... "bonkers"

If you think I am making this up, read the financial press (ok I simplified it a bit for the purpose of this blog). Apparently we are talking some £10bn of profits resulting from these accounting procedures.

Can you imagine any of our clients or in fact any small business going to a bank suggesting that the above accounting procedures should be considered when applying for finance. We all know what the answer will be. Should the banks and perhaps the government focus on abolishing all these rules, and for the avoidance of doubt not introduce new ones? Maybe transparency will create conditions for the economy to move forward and grow?

Incentive for Banks - Quantitative Easing Translated in to English - From ASC Finance for Business

2011-11-07T12:45:00.000Z

"I can’t guarantee that it means that bank lending will rise, but what I do believe is that it won’t fall as far as it might otherwise have done" - I am quoting Mervyn King the Governor of the Bank of England when he announced that the Bank has injected £75 billion into the economy.

The point is that the money has not been injected into the economy, it has been injected into the banking system. What do banks do with the money? Well we know that they are not lending £75 billion to small businesses. We also know that they are not investing into businesses which are generating new employment.

In the old days it was called “printing money” but such honesty is no longer popular, especially when inflation is running at a twenty year high. Today it is called “quantitative easing”. There is a wonderful animated video on You Tube (http://www.youtube.com/watch?v=PTUY16CkS-k) If you’ve got a few minutes go and watch it - it is fantastic.

Henry Ejdelbaum

Economic Advisor required - No experience necessary? - From ASC Finance for Business

2011-10-31T13:22:00.007Z

What springs to mind when you hear the word politician? Apart from the ‘obvious’ we may think graduate, well educated, articulate and possibly sympathetic to the nation (well, the last one may prove debatable) but one adjective that is generally missing is ‘experienced’ - something that we all know comes with age.

Have you noticed the trend that at each political conference there is a speech by a teenager? All the political parties are the same! It is mind boggling to think that 16 year olds are discussing the economy, the country’s welfare, tuition fees and the job market - and all I find myself asking is why? In the days when there were jobs that needed filling it was not unusual to see “No experience required”. This now seems to be the attitude of the parties when they are selecting candidates, too many of our modern politicians have known no work other than politics, which brings me back to our teenage political gurus who lecture at the conferences – they have never earned a living, paid tax or brought up kids – both the teenagers and the politicians are disconnected from the ‘real’ world. In fact, one senior politician admitted to our MD recently that he has never filled in a mortgage application form: surely the right man to help supervising the banks?

Henry Ejdelbaum

Trust me I am a Banker - From ASC Finance for Business

2011-10-24T15:01:00.001+01:00

Let me provide you with an insight into how the ‘bank manager’ role has changed in the last few years! This is a true scenario:

A client of ours has a loan for several million £s with a high street bank and quite rightly has the habit of checking the monthly computer produced statements carefully. For the last few years he has had no real problem, however, this month he noticed the bank overcharged him by several hundred £s.

Now the story begins. When he contacted the bank nobody knew who is dealing with or who could resolve this matter. The original lending manager couldn’t help, the relationship manager couldn’t help, the admin manager couldn’t help, and customer services couldn’t help and so on. Apart from wondering why no one could help, our client was perplexed at the level of service being offered to a ‘valued’ customer. I am not going to name and shame and quote from the bank’s website or their mission statements, because as you guess the way they want to see themselves is in stark contrast to the way they operate.

After a while I found out what the problem was: about 9,000 accounts had been overcharged by one day, because of a computer glitch. In other words, we are talking big money. But now comes the “interesting” part of the story; although the bank recognised the problem and wrote to all their clients whilst organising the correction with a credit to the account –rather than debiting the account within a few hours of the ‘glitch’ happening (bearing in mind these are large valuable clients) they processed the credit 9 days later: That means that clients will be charged 9 days interest next month on the ever so slightly higher amount. Multiply this by 9000 and Arthur Daley would be jealous that he did not work out this nice little earner – maybe it is easier to trust him?

Henry Ejdelbaum

Edward Davenport is coming back - From ASC Finance for Business

2011-10-17T14:22:00.000+01:00

This week’s papers were full of articles about the schemes of Eddie Davenport. I am quite surprised at how long it has taken the marketplace to wake up. Davenport’s features were pretty standard: high showbiz profile, glossy office address, promises which seemed to be too good to be true and so on.

Yet so many people have fallen for the scheme. The question is why. Probably because they were desperate.

In desperate times desperate people do desperate things. The answer is not more regulation or more government interference. The answer is for borrowers to apply common sense. Whenever there is a recession, whenever banks tighten up these types of loan fraud swindlers turn up. The list is long and we’ve seen them all. The common features are very high upfront fees and promises of an easy ride when the borrowers know that their requirements are difficult to fulfil.

So if borrowers know they have difficult requirements then they need to work with a team who acknowledge that they are difficult, who will explain the chances of success and who will then work their hardest. A team which can be checked simply by looking at its track record.

Henry Ejdelbaum

After the Tsunami of Initiatives - From ASC Finance for Business

2011-10-10T11:35:00.002+01:00

The government is producing one initiative after the other to help arrange finance for small businesses. The list is endless and I am happy to admit I am one that is not jumping for joy.

Their new “brilliant” idea: “Credit Easing”. If it is as complicated as the EFG scheme we are likely to have another failed initiative to add to the list.

Its apparent most of the schemes are just so riddled with red tape and complications it automatically discourages businesses to apply. Take for example a quote from a government publication. “Community investment tax relief accredited Community Development Finance Institutions are able to raise lending capital through the Community Investment Tax Relief Scheme” – if you understand please contact me.

I wonder if the Government should leave the lending to the banks and the borrowers and should just concentrate on creating conditions which make people want to do business and the borrowing and lending will follow automatically. The fact is that the SME sector has currently net cash on deposit because it has learnt that over gearing is not sensible. The other fact is that weakening world economies, deepening doubts over the competence of business leaders, confusing messages from politicians do not increase confidence. Confidence is the key motivator for small businesses to invest – they will do so when they see a benefit for the business operation; they will not do so just because a politician has a great idea.

If you want to study more initiatives, what about the following : Enterprise Guarantee Scheme, Independent Commission on Banking, Local Enterprise Partnerships, Enterprise Capital Funds, Project Merlin, Lending Standards Board, Capital for Enterprise Limited, Community Development Finance Institution, Community Development Finance Association, and so on.

Henry Ejdelbaum

Modern Marketing - Is Spelling Important? - From ASC Finance for Business

2011-10-03T12:02:00.002+01:00

There are two different types of school. There’s an old fashioned school (I am not saying that this is necessarily wrong) which talks about the demise of good spelling and grammar and links this with a problem with modern technology. There are many websites and many blogs discussing this topic.

On the other hand, there is a modern school which says that the most important aspect is the fact that the reader understands. For example, there was a test at Cambridge University which goes as follows:

"Aoccdrnig to rseerach at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a total mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Amzanig huh?

PS: Hwo'd yuo lkie to run tihs by yuor sepll ckehcer?"

Perhaps you are wondering how you can read the above so easily?

The point of this line of research is that proficient readers read most words (except very long ones) principally through the first and last letters and a rapid recognition of the general shape and content of the entire word. That's why we typically read misspelled words with no trouble.

I wonder what you think because ultimately it is very important for all our marketing if we understand how the receiver of our marketing messages thinks.

Henry Ejdelbaum

Call Centres - From ASC Finance for Business

2011-09-26T11:00:00.002+01:00

A new “earth shattering” research has been released. Call centres have realised that clients get annoyed when they are forced to deal with a call centre and have to communicate with somebody who hasn’t got a clue what they are doing. The research confirms “a good customer experience is essential”. So a number of companies have not found the holy grail and think it is better to put enquiries straight to experts to let them resolve any issues. It is now called the “right first time” model. I am laughing about this because we have used this model for the last 40 years. ASC doesn’t work with call centres. If we receive an enquiry it is dealt with straight away by an experienced Director. We don’t call it anything sophisticated; it is simply part of our DNA – so I am a little bit confused why any research was necessary – would the money not have been better spent on a donation for a charity?

Henry Ejdelbaum

UBS and You - From ASC Finance for Business

2011-09-19T12:43:00.003+01:00

It was a catchy marketing phrase: “UBS and you”. Now the question is how does it affect you – what are the repercussions? Yes there will be an investigation and probably more regulation; and yes you, the reader and business owner/entrepreneur will have to pay for it. There will probably be more tightening in lending to small business, because that’s the way things go: the big and clever (or perhaps not so clever) boys lose tons of money and the small guys, somehow, have to pick up the tab.

But what is more intriguing is the department in UBS which caused the loss. It’s called “Delta One” like a good action movie – but movies have a director who can direct a positive and happy outcome. Banks seem to have directors who like to gamble – because the underlying business of “Delta One” was nothing more than gambling; no kidding or spin (and no customers involved): “Delta One’s” function was betting on small movements in the stock market!

I have met thousands of business people in my working life and some of them took gambles in their decisions but I have not met one small business owner and entrepreneur [other than bookies] who set out with a business model based on gambling. So – let’s go back to our business and get on with developing and operating our businesses (and looking after our customers).

Henry Ejdelbaum

Double Dutch or Triple A (AAA)? - From ASC Finance for Business

2011-09-12T11:38:00.001+01:00

Double Dutch is certainly right! Dipping in and out of recession since 2008 - not a lot comes as a surprise anymore - but what is happening to the global economy is certainly Double Dutch. Clearly nobody knows what is going on – the only thing we know is that the ‘clever’ guys, in this case the bankers, have not been so clever after all and have made some pretty bad business decisions. The question on our mind is how is it going to affect us all?

Bearing in mind that these are probably the same folk who are now assessing your application for finance - the likelihood of it being granted is slim. It looks as though they will probably just add more obstacles in your ability to run and develop your business (whatever the politicians may say). It is slightly worrying to think those same folk are in charge of whether you receive a yes or no in your finance request and it is worth having a think about what implications their foolishness may have on your application. Or put it another way: Put two and two together and you get……

Henry Ejdelbaum

Undercover Survey Finds Banks Really Won’t Lend - From ASC Finance for Business

2011-09-05T09:00:00.001+01:00

An interesting article in the Mail on Sunday and in the September issue of Moneywise magazine by Jenny Little. OK I am little biased because I did provide some input confirming that “Project Merlin has failed. Banks just don’t want to lend to smaller businesses”.

However, I would like to make an additional comment. Yes all the banks seem to apply procedures and rules and have no entrepreneurial antenna. Bank managers are simply no longer the business advisors probably because they are stifled by their rules and regulations (but we also need to consider that their track record in the past few years is not encouraging). The entrepreneurial “old fashioned” bank manager – clearly this species is now distinct. Bank Managers have no discretion, they are targeted to sell credit cards and insurance, they are prohibited from applying any business common sense because all decisions are centralised. This of course does not help small businesses and they have to look to other people.

For more details on the articles by Jenny Little please go to our website here and here.

Henry Ejdelbaum