Busy yesterday launching some new Ernest Wilson initiatives to our staff which will improve our business. There is a real passion in Ernest Wilsons to improve all the time and it was inspiring to see their response and desire to implement some changes.

One of the Bank's telephoned me later to advise they could not support a loan request for a client buying a business. Okay that happens but what I find worthy of comment is the way it highlighted what I have felt is inappropriate in UK Banking in terms of sanctioning credit.
In this case we are talking about a £25,000 loan to buy a Coffee Lounge and Tea Room business. Input was £25,000 with support requested from the Enterprise Finance Guarantee scheme. The local Relationship Manager and the Senior Manager recommended the loan (the Senior Manager could not authorise the loan even though it was a modest £25,000, as due to the sector it required the second pair of eyes of the national credit team). The national credit team would not agree the loan despite appeals from the local team; concerned centered around the applicants experience and loan serviceability (which boiled down to judging level of drawings required). It is interesting that the local manager who had met the customer, looked in the "white of his eyes" etc had assessed the loan and was content the individual had the ability to run such a business and that the loan was serviceable. The Senior Manager added his support. I know the Senior Manager; he is very experienced.
Is it right that a national credit team, at this level of loan, can override the view of experienced local management, who have met the client, know the area and the business? Yes in some cases, particularly larger more complex cases and of course local managers can get too close and cosy at times with clients. Local managers do have targets to, but they also get "caned" for bad debt which focuses their minds also.
I do think that the balance has swung too far and that local experienced and qualified bankers should be empowered more, especially at these modest levels in non complex sectors. In this case I know the local managers have done all they can to get this loan agreed and share my disappointment - it happens.
Anyway I placed the proposition immediately with another high street bank - I shall let you know who it is if they agree it! Which I hope they will for these excellent hardworking sound people who deserve to be supported.