Credit, Collections & Insolvency News
The Federation of Small Businesses (FSB) has said that the Financial Conduct Authority (FCA) is at risk of losing the confidence of small businesses in its investigation into bank lending.
The FSB has criticised the FCA’s handling of a ‘super-complaint’ it filed, specifically regarding personal guarantees requested by banks from company owners. In a letter to the FCA, the FSB expressed concern that the investigation’s scope excludes over 1m limited company directors in the UK. .
The ‘super-complaint’ filed by the FSB – the first since it was granted the power to do so a decade ago – was lodged amid concerns that small business-owners were being deterred from applying for bank loans by personal guarantee demands.
Craig Beaumont, Chief of External Affairs at the FSB, said “The FCA’s decision to side-step the core issue – the banks’ increasingly blanket use of personal guarantees for UK small companies – is disappointing.
“It is not dissimilar to historic banking scandals where each regulator in this area acknowledges there’s a problem, but quietly retreats and leaves a large group of small business owners exposed – this time, nearly one million limited company directors. It’s a ‘not me, Guv’ approach to regulating; a missed opportunity to improve the lending market.
“Small businesses deserve better and we are seeing what other options are available to us now the FCA has said it’s walking off the pitch.”
