HSBC U-turn for host refused loan
HSBC has temporarily reduced payments on a pub's mortgage after the licensee confronted a divisional manager at a local banking summit for small firms.
Senior figures from major banks were quizzed by around 25 firms at an event organised by Bill Wiggin, Leominster MP and Shadow Minister for Agriculture and Fisheries.
Licensee Simon Smith highlighted stories in the MA about major banks telling hosts they have policies of not lending to pubs — banks deny they have such policies. Smith had been refused an overdraft extension and a request to pay his mortgage in interest-only instalments in April, May and June.
Within a few days of the discussion with Roy Harris, West Midlands regional commercial director, HSBC had agreed to defer full payment on the mortgage of the freehold Lion Inn at Woonton, Herefordshire.
He will pay interest-only for the next three months, meaning monthly payment will fall from £2,100 to £577.
"The best thing to do is go higher up [the company] and get as many people involved as possible — the press, your MP and the council," he advised. "Don't give up!"
Smith said trade is currently down 30% on usual: "It has improved a bit, but it is depressing," he added.
An HSBC spokesman said: "The customer approached us for help after one of these meetings [run by the MP]. We were able to put together what we think is a good way forward." He said HSBC has "never stopped lending" to pubs, restaurants and cafes.
Loans scheme to be 'more effective'
Small-business minister Baroness Vadera says steps have been taken to ensure a Government-backed loans scheme works more effectively.
Serious concerns have been raised about the Enterprise Finance Guarantee Scheme, where Government guarantees 75% of loans. Firms apply via their bank and there have been reports of local branches not understanding the scheme and businesses having trouble getting finance via the initiative.
Vadera told the Sunday Times that after feedback from companies, the Government asked banks to have a dedicated phone line for small-business finance. Banks were asked to put details on their websites about provision of the scheme.
She defended the requirement for firms applying for credit through the scheme to provide personal guarantees of up to 100%.
"As in normal lending situations, personal guarantees are something lenders can request if deemed necessary, but they cannot ask for homes as new security."
