How we will support business borrowers when they need it most
At TSB, we know that borrowing money can be daunting, and that industry scandals have impacted trust in bank lending. We have therefore set out clear key principles we will follow to help businesses that get into financial distress.
If a business banking customer is experiencing financial difficulty, we will seek to help during this challenging time by providing specialised support to help return the company to viability in a timely and cost-effective manner, wherever possible. We seek to act honestly, fairly, and professionally in all our interactions with business customers. We do however need the customer’s co-operation and responsiveness to work together to achieve the desired outcome.
Where we are providing support to a business in financial difficulty:
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We will be fair and transparent in what we do. We will keep the customer informed of the course of action we are taking and why. We are open to challenge, and will manage complaints sensitively in line with our defined procedures.
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We will provide reasonable time for the customer to return their business to health, and will offer flexibility to existing arrangements if it will help to repair the situation. We will continue to provide the same day to day banking services wherever possible, and will consider requests to pay in excess of agreed limits where this involves critical payments identified by the client, such as staff salaries. Affordability and the longer term health of the client will always be a consideration in such decisions.
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We will not raise loan margins on existing facilities if a business is experiencing financial difficulty. Any fees we charge on restructuring facilities (for example extending the term of the existing loan) or additional facilities (for example where the business needs additional funding to support recovery) will be in line with our standard rates (i.e. the matrix of prices that applies to the wider customer base).
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We will not default a business if it is up to date on its loan payments, but a valuation change impacts a loan to value covenant and other covenants are not breached.
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We will not demand full repayment or remove an overdraft outside of its renewal cycle, unless a business has breached our terms of lending, or is demonstrating wider financial distress that would lead this to be an appropriate approach for the customer.
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If we need to engage any third parties in support of an agreed strategy at the cost of the customer, our customers will be fully informed of the reasons why and costs involved in advance of work being undertaken.
And let’s be clear, our business support area will never be a profit centre, and our partners will never be incentivised for additional income earnt on accounts in business support.
