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A man and a woman

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by Peter Switzer

It is popularly asserted that bank lending has become gender neutral. That is, women and men are treated the same and lenders simply look at the credit-worthiness and ability to repay issues when deciding ‘ye or nay’ to a loan application.

This, of course, begs some questions: if it is the case, and a man and a woman turn up for a small business loan, both are 30 years of age and engaged to be married to different people, would a bank manager wonder if marriage and pregnancy could be factors which lower the woman’s ‘repayability’ rating?

Moving with the times

These days banks could not get away with asking for undertakings from women that they won’t become pregnant – like they did in the past!

And is there a hard and fast charter of rights that women can refer to if they suspect they were knocked back for a loan for purely feminine reason?

I asked a bank manager mate from a business banking centre who preferred to do this undercover for ‘Deep Throat-style’.

I asked DT if banks have become gender neutral and his unhesitating replay was: “Well, some banks are, but I once heard of a case where a bank was trying to get an undertaking that the women borrower wouldn’t fall pregnant, however, this is a real exception.”

DT also points out that 15 years ago, some building societies used to totally ignore a woman’s salary on a loan application, so there certainly is an historical basis of discrimination.

Cut to the chase

Cutting to the bottom line, does the law protect women against an unfair treatment by banks because of God’s biological plan for women? Of course it does – these days. But you’d have to prove it.

DT says giving the nod for a loan should not be a gender-connected issue. He points out how two of his staff had children around six months old at home.

In allocating loans, DT looks at the quality of the individuals and, in particular, he says he wants to make judgements about who will be a top class manager.

“Too many businesses fail because the owner is good at making widgets, but can’t make sound managerial decisions. Look Peter, I’d give Maureen [my business and life partner] a loan if she was pregnant because I know she could appoint a manager and run the show with a newly born baby running around her legs, any day!” he says.

I was proud and confused at the same time. I know how good my partner is, but was he saying he wouldn’t give one to me? I didn’t press DT, but I got a strong impression he was implying he knows my wife’s management skills are miles more impressive than yours truly.

Reacting to this, I asked if he thinks the legendary organising skills of women could one day result in positive discrimination towards women? To this, DT says it is a distinct possibility!

Show you mean business

Explaining what he actually looks for in a loan applicant, he emphasises the importance of showing the loan officer that you know the business. “I don’t just mean knowing the product, but everything from sales trends to potential changing market conditions. It is very useful if a borrower turns up to a bank meeting with a business plan.

“This means the loan officer can see what the full plans of the borrower are and it adds a touch of professionalism to the application.”

DT says: “The great majority of business loan applicants don’t bring a business plan with them and in some cases it is recommended that they get together with their accountant to knock up a plan or the borrower is sent to a Small Business Centre for some guidance.”

If you believe you’ve been given an unnecessarily unfair time by a bank manager or loans officer, your first port of call should be the next most senior officer in the bank. After that, it is worthwhile consulting with the Banking Ombudsmen. Of course, you could try other banks, but if you want to stick with the bank you know, or just want to give ‘some stick’, try the course outlined above.

If you get no pleasure there, women who might have to endure some silly demand on them for access to money actually do have recourse to get-even action under Anti-Discrimination laws.

The Anti-Discrimination Act covers sex discrimination, among other things, and credit would be covered under the provisions therein relating to goods and services.

For those purely interested in getting through a loan meeting and securing a loan, the trick is to get yourself a business plan.

By the way, these business plans are essential for successful trading, so you can kill two birds with one stone by putting one together before buying a business and/or taking on the nerve-racking task of beating the bank manager.