The number of small businesses asking the UK Financial Ombudsman Service (FOS) to intervene in disputes over bank loans and overdraft facilities jumped by a third last year, according to a Freedom of Information request from a UK broker.
LDF, acquired from Investec by Cabot Square Capital last year, asked the FOS how many complaints it received from small businesses about loans and overdrafts from banks; the FOS said the number increased from 612 SMEs in 2012 to 816 in 2013.
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The number of disputes between businesses and banks over loans could be greater as businesses with a turnover of more than 2 million or ten or more employees are not able to make a complaint about their lender to the FOS, said LDF.
Peter Alderson, managing director at LDF, says: "Despite the improving economy, funding problems faced by SMEs – even those with strong balance sheets and excellent growth prospects – have not gone away.
"Banks are limited by requirements to shrink their balance sheets and pressure to take a more cautious approach to lending, while on the other they are being expected to increase lending to SMEs."
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