Whisper it quietly, but Britain's banks may finally be beginning to do their bit by offering more support for small and medium-sized enterprises. In certain areas of the business banking market, there is even evidence of a price war.
The banks are starting from a low base, of course. We know all about the constraints on their lending books, which appear to have prevented them from extending credit to deserving businesses. And we know that when the banks have found spare moments amid the rush to turn down loan applications, they've used the time to flog complicated derivatives products to SMEs – not always appropriately. Barclays said on Friday it was putting £450m aside to pay for compensation in such cases.
Still, there are some signs of improvement. Royal Bank of Scotland said last week that it will be the first bank to begin offering loans under the Government's Funding for Lending scheme, reducing interest rates for SMEs by 1.6 percentage points from 1 August and dropping arrangement fees.
It is encouraging to see evidence of better deals for SMEs in another area of the banking sector too. Business banking – the straightforward provision of accounts to businesses – has for some time been significantly less competitive than personal banking. Personal customers regard free banking as sacrosanct.
While banks have been able to introduce subscription charges for accounts offering extra services, fees for basic banking would be much harder to levy. Introducing transaction charges – a fee for cashpoint withdrawals, say – would be commercial suicide.
In the business sector, the cost of banking remains significant. SMEs have always had to pay for the privilege of depositing their money. But all the high street banks have begun competing much more aggressively for business customers, typically offering long periods of charge-free banking for those who switch to them.
Barclays is offering two years' free banking to business start-ups. Lloyds TSB and HSBC offer 18-month deals while Santander offers free banking for a year. Thereafter, charges vary but typically start from around £5 a month just for having an account.
There's plenty more work to do in improving the banking deals to which SMEs are entitled. One problem is the transparency of business banking charges, with a range of fees payable in certain circumstances. Another is the perception that switching bank account might make it even tougher to get credit.
For these reasons, small businesses remain much less willing to change banks than personal customers have become, which is a disincentive to account providers to compete. Still, switching rates are rising steadily, and the banks have made it much easier to move business accounts, just as they have done in the personal sector.
These are small victories, but for SMEs used to battling the banking sector, they are worth taking.
SVG's new fund will back the minnows
SVG Investment Managers is in the process of seeking to raise £50m to £100m for its Strategic Equity Income Fund.
Run by Adam Steiner and Stuart Widdowson, the fund will invest in smaller companies. It will issue ordinary shares targeting a yield of about 6.5 per cent a year, and less-risky zero dividend preference shares, which will pay the equivalent of 6.5 per cent a year in five years, assuming the fund has the assets to make good on the deal.
Small Businessman of the Week: I liked the sales training course so much I bought it...
Shaun Thomson, managing director, Sandler Training UK
My background is as a chartered civil engineer – I travelled the world for a while, living and working in 57 different companies. I realised I wasn't a big-company person – I get bored easily and I like start-ups.
In 2000, I started a sales and marketing business working with an internet services company. I had 22 sales staff but we just didn't seem to be getting the business I expected. I was talking this through with a former colleague, and he recommended a Sandler Training sales course in the US – I went on it and so did all my staff, and within 18 months we had doubled the size of the business.
At that stage, I asked Sandler why it didn't operate in the UK, and I ended up buying the rights to this country in 2003. I operated as the trial franchisee for a year but we now have 27 franchisees around the country. My aim is to have 50 franchises with around 1,000 clients each, which I reckon would be about a 10 per cent market share.
We work with every size of company across all industries and markets, and our aim is to help sales people really differentiate themselves from what their clients are used to hearing. We talk about being 180 degrees different to traditional sales.
The franchise model works really well for us, because we're all about getting people out of the mindset of employment – we can provide people with the handholds to climb upwards, but we can't do it for them.