Some EOBs are facing difficulties in accessing lending, and in some cases difficulty in accessing financial services more widely.
This problem extends beyond employee ownership to the wider business community, particularly SMEs. The FSB, for example, has acknowledged and sought to act on, how the use of personal guarantees by banks can significantly limit business growth, “…forcing entrepreneurs to put their homes or other assets on the line when taking out finance.”
Beyond these wider challenges, EOBs do often face their own specific challenges when accessing financial services. The issue of personal guarantees, for example, can be even more problematic for a trust-owned company, whereas asset financing can be challenging for leading industries in the EO sector, such as professional services.
This issue goes beyond lending, and we have seen cases of banks not understanding the model, even threatening to close down or refusing to open accounts for EOBs.
While our members have often found ways around this, particularly with the support of a strong specialist business support eco-system, in many cases financial service providers have been unwilling to take simple steps to accommodate EOBs in their processes.