Banks And Businesses Must Work Together, Says Forum

The head of a leading business group has urged banks and businesses to find common ground in order to stimulate lending and rebuild the economy.

Phil Orford, Chief Executive of the Forum of Private Business, made his comments while addressing the Better Business Finance event in Manchester - a conference designed to bring both sides together in order to tackle the issues surrounding bank lending to businesses.

Mr Orford, who was the event's keynote speaker, said that the time for "bashing and blaming" had passed.

Instead, he told the bank representatives, business leaders and company owners present that the time had come to move on, acknowledge failings on both sides and find common ground in order to stimulate economic growth.

Mr Orford said: "Surely the time has come to acknowledge the issues and to find ways to move forward, constructively and collaboratively.

"Forget the bashing and the blaming. We are talking about enabling or disabling our recovery - it's now that serious. Businesses and the banks need to take a critical inward look and accept that the days of easy credit have gone."

Highlighting the requirement for business owners to think objectively about how they appear to potential lenders, Mr Orford urged small firms to implement a range of measures in order to improve their creditworthiness.

These measures included offering assets as security, methodically preparing business plans and managing both business and personal credit ratings.

Mr Orford also urged the banks to put a halt to the closure of local branches, telling the assembled industry leaders: "Many communities continue to experience branch closures – even when the branch is the last bank in town.

"This disenfranchises businesses from the major retail banks for business transactions and relationships, especially in rural areas. If the banks are committed to serving businesses and their local communities, this closure strategy must come to an end."

Additionally, Mr Orford called on the banks to improve what they offer to businesses and speed up efforts to produce a viable alternative to cheques. He said: "We need to see new products for business that are relevant for our time.”

(BMcN/GK)