Category: Overdraft Fees

Is It Possible to Get a Business Loan with Bad Credit?

Often one of the biggest barriers to small business and start up founders getting a business loan is a poor credit rating. So, if you have been turned down for a loan because you have bad credit let’s look into ways it may be possible to gain funding for your business even if you have a bad credit rating.

Find out why you have a bad credit record
Review your credit score online and find out what may be causing the problem. A poor credit score can come as a surprise and the first thing you know about it is when you are refused a loan. Sometimes the cause can be rectified if for example there are some discrepancies in addresses, your name isn’t on the electoral roll or if you have missed credit card payments.

Research lenders willing to provide loans to people with below average credit scores
Some lenders will consider business owners with below average credit scores so it is worth doing some research to find them. If your credit score is below 500 this can start to make life difficult and lenders willing to take the risk on you will become harder to find the lower your score is.

Look to alternative sources of finance that won’t require a good credit score
You may find there are plenty of alternatives available when it comes to finding funding for your business. Friends and family might be one avenue if they are understanding and supportive or asset finance could be an option.

Work to improve your credit score
Your credit score isn’t set in stone and it can improve significantly if you pay all your bills on time and avoid running up debts. Taking out smaller loans and using a credit can actually help improve your rating if you are sensible about making more than the recommended monthly repayments.

Barclays reviews overdraft fees…

…in bid to break from ‘sins of the past’

Barclays is launching an unprecedented review of the overdraft fees and charges faced by nearly 12 million of its current account customers in a bid to make a decisive break from the “sins of the past”.

Just days after Barclays admitted it was likely to suffer a £50m fine for the handling of its Qatari bailout, the bank will this week reveal it is pushing ahead with eight commitments to improve service after asking customers what they should do better.

The key part of the campaign will be a complete review of Barclays’ overdraft pricing. Ashok Vaswani, Barclays’ retail and business banking chief executive, told the Daily Telegraph the bank was already trialling a text alert service where tens of thousands of customers are warned they are about to go into the red. This has so far cost the bank £1.5m in lost fees and is likely to be extended. But Barclays is also considering ways it may be able to allow customers with multiple accounts to offset money in one against an overdraft in another to prevent them from being charged.

Mr Vaswani said: “I’m going through the business with a fine toothcomb. We want to de-risk the business and clean up any sins of the past. We really, really have to put customers at the centre of everything we do.”

Barclays’ reputation tumbled through the credit crisis, with last year’s Libor fine followed in the past week by confirmation of the likely penalty it faces for failing to declare it paid £322 million to the Qataris for bailing the bank out in 2008. Barclays also last week admitted that it may have to compensate 300,000 personal loan customers who were given the wrong paperwork for five years. And it came bottom of an ethical poll by campaigners Move Your Money, scoring just four out of 100 for its honesty and service. Each of Britain’s big five banks have vowed to improve service in the past year after the fallout from the credit crisis and the mounting bill from the Payment Protection Insurance (PPI) scandal.

Mr Vaswani joined the bank in 2010 and stated earlier this year that the bank would only succeed if customers were content, and therefore came back to the business during the times of their life when they need financial help, be it a mortgage or sending their child to university. Barclays launched its “Your Bank” initiative earlier this month, asking customers to tell them what they should improve and what other ideas they had for the board. So far received some 250,000 people have got in touch and Mr Vaswani insisted that “for the most part” they were constructive. Some ideas ranged from putting umbrella stands in branches or letting customers use the branch toilet.

But of the eight suggestions Barclays is working on straight away, one will see coin deposit machines introduced in branches to allow customers to pay loose change into their accounts. Barclays is also looking to extend its “PingIt” mobile payment service to 11 to 15 year-olds while the bank also wants to allow mortgage customers to access their accounts online and on their mobile phones.

A new overdraft policy will be worked on over the next 90 to 120 days. Currently Barclays charges as much as £88 for savers that persistently fall into an unauthorised overdraft during the month. The more common charge is £22, where a payment takes a customer into their unauthorised “Personal Reserve” and another subsequent payment is made.

Mr Vaswani said: “The biggest one for me is overdrafts. I’m going to do a full grass roots review of our overdraft proposition. We know that this has been a problem which is why we have already launched the text alert systems in real time.

“I firmly believe that once a customer has been given the opportunity to save £22 they will say to themselves: “This bank is looking out for me”.