The UK banking industry has said that it will take action to help small firms affected by the economic downturn.

The British Bankers’ Association (BBA) has issued a revised ‘Statement of Principles’, setting out how banks will deal with small firms that have encountered difficulties as a result of the slowdown.

The BBA said that the main changes to the guidelines include: pro-active contact by banks if they think firms might be in trouble; an offer to discuss all concerns in person; prioritising business assets before considering personal assets as security; switching business accounts within 5 working days; and helping customers to revise their business plans and forecasts during the recession if necessary.

Amendments to the guidelines, which were first published in 1997, came about after consultation with the Department for Business, Enterprise and Regulatory Reform (BERR).

Angela Knight, the BBA’s chief executive, said: “The Principles show that banks are committed to working with business customers to find ways of overcoming the difficulties they may face in changing markets and through the economic cycle. All businesses experience these challenges. The Principles also emphasise that if the owners and managers of the business take early advice and action, they can work with the bank to sort out difficulties.”

Ms Knight added: “All our major banks have skilled specialists to deal with customers in difficulties. They will be involved in the small number of cases when, despite everyone’s efforts, a business is failing. The industry and its customers are well aware that good managers and responsible banks are beneficial to everyone concerned, directly benefiting most of the businesses that succeed, and also the wider community.”

News update from London accountants Carter Backer Winter (CBW)