BERG CONTINUE TO BE AT THE FOREFRONT OF SME LENDING DISCUSSIONS

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Posted in:berg Advisory, Business Finance|November 12, 2014 | Join the mailing list

Berg have begun a busy November of meetings, panels and discussions about funding for the SME sector in the wake of their Banking Report, which was published in June. The investigation into the ‘Big Four’ – RBS, Barclays, Lloyds and
HSBC – discussed their relationship with British SMEs looking to borrow.  A ‘break-down of trust’ has affected many businesses in their relationships with major high street banks and current lending relationships. And it seems that trust issues remain high
on agenda for SMEs.  

‘Who is filling the gap left by banks?’
On the 5th of the month, Berg attended the
Pro Manchester ‘Hot Topic’
discussion, which focused on the question ‘Who is filling the gap left by banks?’ with speakers from Enterprise Ventures and KPMG. One of the key issues raised by the Panel was that banks were not going to provide the SME market
with anywhere near the same level of funding as they did pre-2007. Discussion focused on the opportunity that had been left for alternative lenders to fill the gap, but there was an air of caution surrounding the prospect of alternative lenders being ‘flavour
of the month’ while the banks are being openly criticised, which is unsustainable. One of the major concerns raised in the discussion was surrounding the alternative lenders’ ability to meet the demands of the varied types and levels of lending required by
SME sector. In the banks’ general absence, will unregulated, dubious lenders infiltrate the market?

Berg live tweeted the panel discussion with insights and updates for the benefit of their followers.  

A ‘Lost Generation of Entrepreneurs?’
Coming up on the 13th of November is the
‘Lost Generation of Entrepreneurs’ seminar
, hosted by The Business Desk in association with Berg. The agenda will focus on issues previously raised by Berg’s Banking Report and also tackle current barriers to business growth, the role of crowdfunding, and
the prospect of a new government. Reuben Berg and Alison Loveday, both partners at Berg, will be heading up the panel discussion, and business leaders can use this opportunity to ask the assembled entrepreneurs, advisors and specialists on the panel any other
questions they might have about the future of SME banking.

Berg’s Banking Report has dug deeper into the issue of UK business banking and why the SME lending landscape is a difficult place to be for many borrowers. There is a need for “openness and transparency”
at the centre of SME banking, in the words of Managing Partner, Alison Loveday.

The Business Desk covered June’s Banking Report in considerable depth, so this will be a welcome opportunity to air thoughts and solutions in the industry.

‘Removing Barriers to Growth’
The day after sees
Conference No.8
, a hugely popular round table-based conference, which will join together decision-makers from businesses throughout Manchester to share ideas in a series of round table discussions. Various tables will be hosted by delegates from Berg, JMW,
PwC and Natwest, amongst others. Topics up for discussion will focus on the germination of a business, growing a business and leading a business – areas that can help business leaders and professionals no matter what stage they’re at with their own business.
Berg’s area will be ‘Removing Barriers to Growth’, a discussion of the SME lending landscape, its culture and alternative routes to funding, as part of their mission to bring information and insight to business owners and associates throughout the North West.

These events have come at a crucial time, as more enlightenment is constantly needed in the SME funding and lending sector. Last week it was announced that a competition inquiry will be launched into banks’ current accounts and SME banking, which will be a
lengthy process conducted by the Competition and Markets Authority that could take 18 months in total. Barclays conceded that “various developments, innovations and stimuli are changing the competitive landscape”, according to BBC News, but they also considered
the probe to be ill-timed. The consensus, however, is that the banking industry will cooperate regardless, and the British Chamber of Commerce has gone so far as to call the British banking sector “dysfunctional”, and “impeding the growth prospects of some
of our most promising young companies”.

The CMA’s concerns also extend beyond SME finance, with few people switching banks and a general ‘lack of transparency’ highlighted as common concerns in a survey of bank customers conducted in July of this year. A quicker switching system has been introduced
for all those who feel the process is much too slow, but quicker progress is needed for SMEs.

Berg are committed to providing commercial solutions for SMEs, corporate enterprises and individuals, and this calendar of recent events demonstrate how active a discussion SME finance has become, and how Berg continue to be at the forefront of the debate.

“Throughout my career I have been fortunate enough to work with many SMEs who have a steely determination to succeed and to play their part in taking the British economy forward. Regrettably, in recent years, all too often
the ‘rug is pulled out from under them’ through no fault of their own.

Berg has brought such cases to the attention of the Treasury Select Committee which is investigating SME Lending Practices, and also the FCA investigation, just as we have with investigations by Panorama, Radio 4, and The Sunday Times.

Openness and transparency are the bedfellows of better SME banking and it is our hope that the issues raised will paint a more accurate picture of the current SME banking and financial landscape and create opportunities for improved offerings in this space
which will be more aligned with the needs of SMEs.”

Alison Loveday, managing partner, Berg.

For more information about any of the above or for practical advice on this or any other aspect of banking and financial disputes, please contact the Berg Banking Litigation Team on 0161 829 2599 or email us at
help@berg.co.uk.

Alison speaks on BBC Panorama’s ‘Did The Bank Wreck My Business?’ about the wrongdoings of the banks to their customers. Read more
here.

(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice
should be obtained before taking, or refraining from taking, any action as a result of this article.) 

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