More than 70% of FSB members responding to a poll in the run-up to the Budget on April 22 said they thought a corporate mediator would help to build better relations between banks and small businesses. The corporate mediator would act as an independent go-between, brokering agreement on decisions which are currently at a stalemate, including bank lending to small firms.
FSB research shows that around a third of small businesses consider their bank to be less helpful than before the downturn. A further 60% say there has been no change in the banks' attitudes to providing finance in the form of loans and overdrafts, despite the difficult economic period.
While more than half of small firms prefer to communicate in person with their bank, rather than by letter, online or over the phone, many have seen their relationship with their local branch manager deteriorate over the past few years.
The FSB is calling for the Government to put in place a corporate mediator to resolve these problems, represent both sides in disputes and discussions and de-politicise the issue of bank lending. The FSB believes this would re-establish trust between banks and businesses during the recession and guide the economy into recovery.
The mediator, which the FSB suggests could operate through the Regional Development Agencies, could perform the following tasks:
- Act as a point of contact for entrepreneurs and small firms having trouble getting loans or overdrafts
- Facilitate discussion between business and banks
- Mediate in cases where viable businesses cannot get finance
- Report regularly to the Government, identifying trends and offering solutions
