Business banking news review: week ending 11 July 2013
It may be a thought that’s a bit hard to fathom in the current economy, but it turns out that the UK banking industry isn’t quite as bad off as it used to be.
In fact, just this past week Moody’s has given the entire industry as a whole a reprieve by changing its outlook assessment. In the days since the credit crisis Moody’s has held the line by assessing the industry as ‘negative,’ but now for the first time in quite literally years the organsiation says the UK banking sector has finally stabilised.
Things are far from perfect in the UK banking world, though, and Moody’s was quick to acknowledge the fact that there’s still simply too much risk exposure in the firm of eurozone instability and commercial real estate. Still, for the most part it said that things have gotten better overall, even in the face of ‘low growth prospects.’
Hey, I’ll take it as one for the win column; as far as I’m concerned any news that doesn’t involve one bank or another being accused of a new scandal as a bloody miracle. Speaking of miracles, one major bank also announced some good news this week in its going to begin offering pre-approved business loans to hundreds of thousands of small business bank account customers!
In a move that I can only classify as mind-boggling, Barclays said that it wants to support small and medium-sized businesses in providing them working capital to expand and grow. Of course this also reduces the capital needs of Barclays as well but that’s besides the point – it’s a win-win situation for both SMEs and the bank, which is about as rare as teats on a bull if you ask me.
In a way, a pre-approved loan is not that different than an overdraft facility if you’re wondering how it works. Customers have access to a credit line when they need to access it, but unlike an overdraft facility it costs less for a bank to manage one. Let’s hope that the new scheme, when it launches next month, isn’t prohibitively expensive like some banks’ overdraft facilities can be – in some instances an unauthorised overdraft can be more costly than one of those 4,000 per cent interest rate payday loans, if you can believe it!