Banks are being urged to restore local lending powers to help small businesses survive. 

The Forum of Private Business (FPB), which recently joined the Campaign for Community Banking Services (CCBS), called on banks to keep local branches open to make use of their “real knowledge of local business”. CCBS recently revealed that 2,213 bank branches have closed since 2000 – almost one in five (18%) of all local banks.

According to research from the FPB, a quarter of respondents (25%) said ‘quality of relationship with a bank manger’ was a key factor behind choosing a bank. 

“Our members are frustrated at what they see as a creeping tendency towards over-centralised decision making within banks that does not consider their businesses on their own merits but is more often based on factors such as the sector they are in,” said FPB chief executive Phil Orford. 

“There must be a commitment to restore local business lending powers so risk can be gauged on a case-by-case basis rather than the one-size-fits-all, tick-box mentality we are seeing now.”

Baz Patel of Molly’s in Luton, Bedfordshire said that centralised banking hinders his business. “Banks need to be able to look into accounts on an individual basis,” he said. “If you’ve got good track history with the bank that should be taken into account. I’ve not had one bounced cheque or direct debit but your track record means nothing if they don’t know you.”

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