More SMEs lodge complaints to the ombudsman than ever before

The number of SMEs that issued a complaint to Britain’s Financial Ombudsman in 2012 increased sharply supporting the claims that many small businesses make that they not given access to the finance needed to grow even though the government has been pushing for increased lending.

Last year the Financial Ombudsman reported that they received 17% more complaints than last year according to figures from Syscap the UK finance provider. Syscap stated that companies were most likely to complain that banks would not offer them overdrafts, were refusing to renew their loans or were only offer them loans with higher rate or fees.

In addition, firms were unhappy at being offered poor choices of financing such as overdrafts that come with high interest rates attached that can be recalled at the bank at any time in place of a traditional loan. The small businesses are blaming new regulations that arose as a result of the financial crisis causing many lenders to cut their financing practices leaving many SMEs out in the cold when it comes to lending.

The UK government has pledged to help revive the flow of credit to SMEs in an effort to help boost the economy in the UK but over the past year complaints increased instead of decreased despite several efforts of the Government to push for more lending in 2012.

Chief executive of Syscap, Philip White, stated that it is clear that small businesses are going to continue to face problems when they seek out lending because of the high number of complaints that other small businesses have already issued. He explained that the regularly hear from many small business owners that banks are still using the tough credit environment to explain why they can only offer loans to customers that come with high fees.