Date: 14/03/2016 | By: Liz Painter

The banks’ lending decisions – especially when it comes to business finance – can be difficult to fathom. We spoke to BizSmart Select Member Ian Priest of Independent Banking Consultants about how and why they get it wrong, and what you can do about it.


If this topic is of interest, then you may want to listen to Ian’s webinar Click Here to get more of an insight in how you can overcome the challenges facing commercial borrowers.

Ian Priest, a former commercial banker, founded Independent Banking Consultants in early 2000. He arranges finance and advises on banking and business issues, and has raised more than Ā£280million to date.

As someone who has worked in the industry, Ian understands how the banks make their decisions and is able to use this information to help and advise business owners who want to raise capital as they work on growing their business. This may be to fund new premises or new equipment, or simply to restructure existing debt.

Banks’ lending decisions – how do they decide?

The banks look at specific information and go through a particular process in making their lending decisions. This leads to challenges for commercial borrowers who don’t know what information would help their cause, and don’t understand the process. There are flaws in this system, and by taking the right advice from the right professionals, it’s possible to overcome these challenges and get the banks to lend you money.

Who can help you to apply successfully for commercial loans?

Many business owners go to their accountant, a business advisor or a broker to help them in the process of applying for business finance. But the reality is that often these professionals are not experienced at dealing with banks. It’s very important to find a trusted and recommended specialist to help with this process, as there are many people in this industry who don’t have the requisite background or knowledge.

Why do bank’s turn businesses down?

There are flaws in the way the banking industry works today, and some of it comes down to the training that banking staff receive. There has been a focus on sales training rather than professional banking training for many years, meaning that some lending managers don’t have the knowledge to properly analyse your case. They may also have a heavy workload and be lacking in the time needed to make a careful and considered decision.

It may also be that bank’s staff have not asked you the right questions, and if you haven’t told them a crucial bit of information (which you might not know is crucial) they may not ask, and you may be turned down as a result.

How can you positively influence the bank’s lending decisions?

  • Take advice from a qualified source, preferably a trained lender
  • Consider which bank you ask. They all have different lending policies and are likely to be more flexible with new customers than existing customers
  • Consider the alternative finance market
  • Avoid a ‘one-horse race’ – approach as many banks as possible to reduce the risk of the flawed lending process working against you
To find out more about this topic, listen to Ian’s webinar – The Broken Banks