Sir Mervyn King Writes To British Businessman

By Enda Brady, Sky Correspondent

When Mike Benson was refused a £10,000 loan to buy a new transit van for his company selling air compressors in Worcestershire, he despaired.

His business turned over £640,000 last year, and even more the year before - the kind of thriving small British business that Chancellor George Osborne has repeatedly urged the banks to help.

But still the answer was a firm 'no'.

All he wanted was a 12-month loan, but the money was not forthcoming.

"I was angry, annoyed, yes all of those things, but I was also slightly shocked and puzzled really," Mr Benson told Sky News at his company base outside Bromsgrove.

"We've been in business 20 years and the van needed replacing at a time when we had just paid a corporation tax bill of £10,500.

"The bank refused me on the basis of 'fixed assets'. But we have very few of them.

He added: "In the old days they would have taken a look at our business and at us and said 'yes'.

"But the banks have lost their way and they have lost touch with their customers.

"You struggle to even find a phone number for your bank. It's all done by call centres in a kind of 'tick box' fashion."

The personal letter was printed on Bank of England headed paper

So Mike decided to write a letter, not to the boss of his bank, but to the governor of the Bank of England.

And he was astonished to get a signed response from Sir Mervyn King himself.

It read: "I was sorry to read of the difficulty you have had in trying to replace your transit van.

"I can fully understand how maddening that, and the behaviour you describe from the banks you have spoken to, must have been.

"Your experience is common to that of many companies across the UK that I have visited recently.

"I would encourage people who have had problems with their bank to try new lenders. One such example is Handlesbanken, a long established, but relatively new to the UK, Swedish bank."

So will the publicity surrounding his letter shame the banks into lending to small businesses again? Mr Benson is not so sure.

"Oh, don't get me wrong, I'd like to think so. I'm just not that confident," he said.

"More chance of pigs flying at the moment, if you ask me!"

He eventually got the money and the van - but says he will take his business elsewhere in future.

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