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Small Business Banking Tribunal in the Pipeline

HIGH street bank TSB has thrown its weight behind calls for a tribunal system that would allow small businesses to challenge lenders over unfair treatment.

It has never been easy for SMEs to attain finance. Their limited turnover makes them unstable borrowers, the subsequent vulnerability frequently leading to exploitation. Bank scandals such as Royal Bank of Scotland’s GRG have led to a general distrust in institutions, but have not removed small business’ need for cash.

To generate a conciliation between small business owners and banks, there has been a recent call for a tribunal to facilitate small business investment and expansion. Initially instigated by The Mail on Sunday’s Justice For Our Firms campaign, the proposed tribunal will resolve disagreements between firms and face any malpractice committed by their banks.

SME finances have suffered for years. Late payment has proved relentless, acting as another obstacle between small firms and their attainment of business growth.  Small businesses are the lifeblood of the economy and it is time for their position to be strengthened otherwise the country’s whole economic future could be disturbed.

In a major boost for the campaign, TSB has spoken up in favour of the tribunal. Having such a prominent institutional figure backing the proposal could encourage its success. The All-Party Parliamentary Group on Fair Business Banking (APPG) has led calls for a tribunal system, and has criticised the alternative – an improved Financial Ombudsman Service – as “not enough”.

With the Brexit deadline fast approaching, it is important that the whole business community has all the tools available to reach success. Small business finances have been persistently threatened by late payment, cold weather, low profits and gaping finance gaps. Modern concepts such as Alternative Finance have emerged to ease financial distress and encourage expansion and ambition.

The maltreatment of small firms has been apparent, whether it’s from banks or large firms who refuse to adhere to pre-determined payment terms. Large institutions have historically escaped scrutiny or even judgement. A case in point is the construction giant, Carillion; nine months later and its mistakes are still being paid for by their small suppliers.

Richard Davies, TSB’s SME banking director, said it is ‘really important [small businesses] are given the protection they need to thrive’.

He added: ‘We support the APPG’s work to make banking better for UK small and medium-sized enterprises.’

This tribunal should deliver penalties down upon unethical operations and their puppet masters, restoring some confidence to the financial environment. The important lesson for small business owners is preventative and credit management companies can help enlighten.

At the Credit Protection Association, many of our Members are small business owners and have suffered from low turnover on account of late payment or stunted expansion opportunities.

At CPA, we concentrate on debt recovery and credit protection. The collection team will chase down unpaid invoices and restore financial stability, while the credit monitoring services secure a strong financial future. The combined power of credit reports, credit checks, credit rating information, directorship register and County Court data, all ensure our Members not only survive the next economic crisis or scandal but have acquired the tools to avoid it altogether.

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
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The Latest Insolvencies to 15 Oct 2018

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