FD lending survey shows opportunity for a new bank

Formations Direct recently surveyed  SME on bank lending , with the following results suggesting on opportunity for a new SME bank to start-up and grab a chunk of business by providing a decent service with fair rates of interest.An expectations gap looms large and as long as there is a perception that service is poor, decision making opaque and rates are unfair banks will struggle to win over SMEs.The only surprise to come out of this was that the numbers requiring their house as security wasn’t higher.

• 70% of those refused at the initial stage expressed surprise at the decision
• 64% found the whole process difficult
• 62% achieved an early outline approval
• 58% received their loan within 3 weeks of applying
• 69% of those rejected after formal application expressed surprise at the refusal
• 54% did not require to put up their house as security
• 70% of formal submissions were approved
• 57% said the terms & conditions were exactly as those initially discussed
• 49% felt that the rate of interest was fair