New research by eBay reveals how, shock horror, high street banks are still reticent to lend money to small and medium-sized businesses. However, what does make interesting reading are the comparisons between each bank based on what their customers think.
Do any of the banks come out smelling of roses?
The Online Business Index, undertaken by eBay, takes a look at the relationship between banks and their business customers. On the issue of lending, only Santander comes away with any credit (so to speak)…
% of businesses unable to access new finance from their bank
* RBS/Natwest 37%
* HSBC 36%
* Lloyds 33%
* Barclays 32%
* Santander 19%
Because of this tight lending more and more businesses are having to rely on expensive overdraft facilities. Once again, Santander fares the best with only 19% relying on overdraft facilities, but a shocking 41% of HSBC respondents are having to rely on these expensive methods of raising finance.
% of businesses forced to rely on an expensive overdraft facility
* HSBC 41%
* RBS / NatWest 39%
* Barclays 35%
* Lloyds 29%
* Santander 19%
With the UK economy gradually pulling out of the recession over the last year, businesses would be forgiven for thinking that banks might become more helpful as a result. Alas that’s not necessarily the case, even with regards to Lloyds who were bailed out with taxpayers money. In fact, it is Lloyds who fare the worst.
% of businesses which say their bank hasn’t been more helpful since the recession began
* Lloyds 58%
* HSBC 53%
* RBS / NatWest 50%
* Barclays 50%
* Santander 48%
Jody Ford, eBay UK’s Director of SME Businesses said: “Government recently announced a series of measures to encourage enterprise in the UK, but it needs to do much more to get the banks lending. It’s been nearly a year since we scraped out of recession, and three years since the financial crisis began. So it is unacceptable that a third of SMEs are still unable to access finance. SMEs have a difficult job trying to protect their profit margins and keep costs down, so it’s concerning to see so many businesses being forced to rely on expensive bank overdraft facilities.”
eBay’s survey was based on the responses of over 600 SME’s doing their business via the online marketplace.
However, some would argue that eBay are just as guilty of poor customer service by requiring sellers to operate a PayPal account which takes a cut, along with eBay itself of course!