SME owner receives letter from Mervyn Kind regarding loan disapproval

After being refused a bank loan worth £10,000, an entrepreneur who runs a business with an annual turnover of £640,000 received a response to the letter he wrote to Sir Mervyn King, the governor of the Bank of England.

Mike Benson is the owner of Airwave International, a company specialiaing in the export of air compressors, and was so angry at the disapproval of his funding from the Bank of Scotland that he wrote a letter to Sir Mervyn; and he could not conceal his shock when the governor of the BoE responded to his letter.

Sir Mervyn wrote that he fully understood how incensing the bank’s behaviour was from the description that he got from Mr. Benson’s letter adding that the latter’s experience was not uncommon to a number of the companies in the country that he had visited recently.

Sir Mervyn continued to say that the government would ask publicly owned banks to grant more loans to SMEs or to guarantee bank loans to SMEs, or offer encouragement to new banks, which had the capacity to match SMEs borrowing needs, to join the lending market.

He added that the Bank of England could not partake in decisions such as which sectors are liable to receive funding and on what basis, and that those matters were to be decided by rightly elected officials.