Banks - A necessary evil.

Hi Guys,

Just wanted to get other people's opinions on High Street Banks. 

Whilst I understand that recently they have come under a lot of scrutinary, why are they making it so difficult for small businesses, not only to access funding streams but just to survive in general. 

I have been trading as a sole trader for 3 years, until January I decided to go limited. Therefore the banks are treating us as a startup business, which has its perks (free banking) but seems to be a very limited account. Santander lost a cheque, we closed that account.

Barclays reviewed our account and closed it, as I had moved address, I no longer met their "criteria"

Have finally opened an account with HSBC. 

Has anyone else been treated this way?

Why are the banks not helping SME's, after all if it wasn't for people like us, the economy would never of had the money to bail the banks out.

*RANT OVER*

I haven't had any of the problems you've had.  We've been with HSBC ~4 years now, no cock ups, though the recent "we're gonna charge you £6/month for something to do with foreign payments, even though you never make them" did piss me off...especially as we've recommended them to lots of people on the basis the account was completely free (makes me look like a liar/plonker).

They didn't allow me a credit card at the beginning, even with a pathetic credit limit.  I found this slightly insulting but I didn't need it so no impact beyond my ego!

I have had a few clients have real issues simply setting up a current account (without an overdraft facility) which I really don't understand.  They've needed us to write letters confirming this that and the other, which is ridiculous just to allow someone to deposit money into an account.

I totally agree. It seems just crazy. 

Being declined is always a huge hit to the ego. However the marketplace does seem to seriously lack a basic account. 

Quite simply, we do work for a client, client pays us. Job done. 

3 years of sole trader accounts they didnt take into consideration. 

Just feel like the whole world is against the small business. 

Somewhat disheartened about being in buisness. 

When talking to clients about possible incorporation of a sole trader business, I now always ask "do you anticipate looking to get a mortgage in the next couple of years?".

Main reason being like you suggest, a lot of lenders will disregard the fact a new company may be a continuation of 10 years successful stready sole trader business.  They'll just see it as you having a brand new business, hence no track record and high risk.

Thing is, you and I aren't in a position to change this, so sadly we all need to play by their rules if we want to use their services.

That's exactly it...

I guess for now, we just have to keep quiet and get on with it :)

Banks are necessary but there are alternatives to the major banks.

Try the Co-op they have a good deal for FSB members.

There is a fundamental change in the relationsahip between business and banks. This may also reflect on to personal banking

What is likely to emerge is a simple 2 - tier system where you gett to choose either 'free' banking which will be no-touch internet banking with little flexibility but decent day-to-day processing, or a contact based service for which you pay.

People are keen to harp back to he 'old fashioned bank manager - well this sevice was paid for and it costs money to run.

It will be interesting to see what people choose.

I would be more than happy to pay for the services I recieve. I just wish that we could go back to the days where a business manager made the decisions. Not a computer.
We don't all fit in simple boxes.

As an ex Banker who travelled a well worn path up the staff pyramid learning my trade along the way by spending a couple of years on each desk I despair at what people are experienceing these days. Your comments are not unusual. Whatever Bank you are in now there will be someone else with a horror story about it.  This usually highlights a lack of knowledge, awareness or discretion to shift the system an inch to take account of your llittle requiremnet in some way. 

This last week I had a word with an old colleague who is now some exalted Regional Director of something within the Bank I was dealing with because they were being less than accomodating to my client much lower down the scale. Yes, he made the phone call, but it diidn't make a scrap of difference. "The computer says no" is now an every day reality and not an excuse, as it was previously. 

Anyone wanting to see further opinion on these things is invited to view some of the articles I have out there. If you do a search on the Blog on my website you will find plenty to amuse you. Alternatively see http://bobshepherdassociates.blogspot.co.uk/search?q=banks which should do it. 

It's a shocking position to be in but we are stuck with them and neither we nor they can do anything about it quickly. 

Hi Folks,

There are a few golden rules; one being shop around!

As an FX broker I have first hand experience on how some of our clients have been treated by banks. Like William mentioned, sometimes your decision is made by a computer. Especially when it comes to international payments or forex, banks tend to go for the "one rate fits all" approach.

Again, shop around. There are many FX / international payments companies out there, all offering a more tailored and better prices alternative and with most of them, you will be able to speak to a dealer.

Banks - definitely necessary, but somewhere along the line they have lost their clients best interest...

Thanks,

Herman