FPB: pubs need more local financial help

The Forum of Private Business (FPB) is calling on banks to restore local lending powers to help pubs and small firms access affordable finance as a survey reveals they expect to need 20% more this year.

The FPB has joined the Campaign for Community Banking Services (CCBS) after it was revealed that 2,213 branches of leading high street banks have closed since 2000 — almost one in five (18%) of all local banks.

According to FPB's Economy Watch survey, firms expect they will need 20% more finance for development in 2011, but the amount they expect to be able to borrow has slumped by 27%.

Meanwhile, the amount businesses expect to receive internally through family or friends has increased from 10% last year to 45% in 2011.

"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 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.

"However, it is true that many small businesses need to up their game in managing their financial information in order to prove to banks they are creditworthy."

CCBS director Derek French added: "Businesses, more than any other sector of bank customers, need convenient branch counters and this is particularly relevant to retailers dealing in cash and cheques.

"When local banks close in a community, business and other users from the surrounding area go elsewhere to bank and take their local spend with them — to the detriment of the community's retailers."