Trade takes banks to task over credit

The MA has teamed up with trade groups and campaigners to lobby banks to start lending to pubs again.

A letter, drafted by the MA, has been sent to bosses of six major banks that have reportedly told licensees they won't lend to pubs and other licensed venues.

The letter asks banks to spell out what they'd do to ensure credit is available.

"Premises operators say they are being told the sector is deemed 'too risky' so no finance will be available, regardless of the merits of the business itself," it says.

The banks have all denied they have such policies, but the letter says licensees report that finance is simply not available to pubs at branch level. "There have been reports of credit facilities such as overdrafts being withdrawn or scaled down," it adds. The letter says this situation is "unacceptable", especially as five banks — all except Barclays — have been bailed out by the taxpayer.

"We understand banks need to be responsible in their lending policies and shouldn't prop up businesses destined to fail. But a blanket refusal to lend to any sector doesn't appear to be a sensible investment decision and could jeopardise otherwise profitable businesses.

"We urge you to ensure that pubs, clubs, restaurants, hotels and similar businesses are judged on individual business merits when they ask for loans or credit facilities."

The letter also asks banks to ensure they make loans available via the Enterprise Finance Guarantee Scheme, whereby the Government guarantees 75% of loans.

Meanwhile, the Federation of Small Businesses has called for an independent mediator to broker agreements between banks and small firms — 70% of FSB members back such a move. The group highlighted similar schemes' successes. There was a 64% success rate on the 4,000 complaints to the Credit Mediator in France.

The letter is signed by...​

Nick Bish, Association of Licensed Multiple Retailers chief executive

Tony Payne, Federation of Licensed Victuallers Associations chief executive

Andrew Pring, MA editor

John Grogan MP, All-Party Parliamentary Beer Group chairman and MP for Selby

Greg Mulholland, MP All-Party Parliamentary Save the Pub Group chairman and MP for Leeds North West

Neil Robertson, BII chief executive

Paul Smith, Noctis executive director

And sent to...​

Lynne Peacock, Clydesdale & Yorkshire Bank chief executive

Michael Geoghegan, HSBC chief executive

J Eric Daniels, Lloyds TSB Group chief executive

Stephen Hester, RBS Group chief executive

Antonio Horta-Osorio Santander Group, chief executive (Abbey, Alliance & Leicester, and Bradford & Bingley)

John Varley, Barclays Bank chief executive