I was reading an article in the sunday papers about an undercover journalist who had approached the high street banks with a business plan. He was requesting a £3,000 overdraft facility for a retail jewellery business.
His complaint was that all the lenders had declined the overdraft but some had offered a credit card with a £3,000 limit. He did however advise that Lloyds TSB had asked him to consider an invoice finance facility.
This is clearly inappropriate as he has a retail business selling on a cash basis to the general public.
Unfortunately, this highlights a common issue. The front line staff in many banks are not particularly well educated or well trained. However, they are targeted to sell products they simply do not understand.
Business owners can end up with facilities they do not really want or poorly structured facilities that are not fit for purpose.
Unfortunately, this can give the industry a bad name.