Support available to SMEs facing financial challenges

Find out how you can help your clients

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The Business Banking Resolution Service (BBRS) has published research which reveals that two fifths (41%) of UK SMEs believe their business may be in financial difficulties in a year’s time. Earlier research also revealed that businesses are most likely to turn to their accountants for support with banking disputes when they are in difficulty.

Against this backdrop, there is potential for the number of businesses with banking complaints to rise. Free dispute resolution services allowing businesses to raise a complaint against their bank could be needed now more than ever, and accountants are well placed to help SMEs access this support.

Cost pressures

The researchers asked 522 senior business decision makers at UK companies, with an annual turnover of between £5 million and £15 million, about the challenges they believe their businesses are likely to face in the year ahead. One in six (16.5%) of SMEs believe they will fail to meet their debt obligations over the next 12 months. A small minority (3%) expect their business to wind down.

When asked about the greatest challenges for their business over the next 12 months, SME leaders reported the main concern as rising wage costs, cited by more than a third (36%). This was closely followed by increases in non-wage business costs (32%), staff retention and recruitment (31%) and rising interest rates and increased borrowing (28%).

Business banking dispute resolution

Despite the wider financial and economic pressures, SME banking satisfaction rates are high. More than four fifths (86%) of SMEs say they are satisfied by their business banking service, compared to just 10% who are neutral, and only 3% of SMEs say they are dissatisfied. Of the SMEs that have made a banking complaint, a quarter (24%) have not been resolved, but the large majority of those unresolved complaints are about minor issues.

Whilst this may show the wider picture, when a business banking relationship sours, some business owners are left with no option but to take legal action against their bank, which can be prohibitively expensive.

The Business Banking Resolution Service went live in February 2021 and was set up to provide free dispute resolution support to help small businesses, specifically those which are too large to use the Financial Ombudsman Service, to challenge their banking issues outside of court.

How accountants can help

According to earlier research from the BBRS, small business owners are most likely to go to their accountants for advice on banking issues. The 2021 survey of 750 small business leaders found that 44% of SMEs go to their accountants for advice on business banking. This suggests that ACCA members are well placed to recommend services, such as the BBRS, as a source of free dispute resolution to their clients.

Glenn Collins, Head of Technical and Strategic Engagement at ACCA, said: ‘As a supporter of the BBRS and its work, we wholeheartedly back their call for SMEs to ensure they have a voice when it comes to unresolved banking disputes. Accountancy and professional services firms may be aware of contemporary banking issues affecting their clients, so we are urging our members and beyond to recommend visiting the BBRS website where SMEs can register for this free service.’

You can register a complaint or find out more on the Business Banking Resolution Service website.