1-5 Bank of Dave

• Do you have a bank account?
• Do you think your bank gives you good service?
• Do you have to pay for your bank account? If so, is it good value for money?
• If you needed to borrow money, would your bank lend it to you?

Has Dave started a bank because he wants to be rich, or because he wants to help people?

Bank on Dave: one man’s crusade to help small businesses raise finance

1. The banks are “rubbish”, according to Dave Fishwick, a Burnley businessman who has made millions as the biggest minibus supplier in Britain. It’s an opinion that’s probably now shared by millions as the Barclays scandal unfolds and NatWest picks up the pieces from its service meltdown.
2. As he drives round his home town, all Fishwick sees are the leftovers of an industrial past, closed shops and signs offering places to rent. But unlike almost everyone else, he has done something about it. In a unique model, which links savers in his home town earning only a very small amount of interest on their deposits with local businesses starved of cash, Fishwick has opened ‘Bank of Dave’. It’s already lending £25,000 a week, with hundreds of happy local customers and many more on the waiting list.
3. Pensioners earn 5% on their money – better than any deal on offer from the high street banks – while small business borrowers pay 8.9% to 14.9% a year in interest, or less than the rates often charged by conventional banks.
4. All profits go to charity. “This is not about adding more zeroes to my net wealth. After all, you can only drive one car at a time or go on one holiday at a time. Sometimes you just have to stand up and make a difference.”
5. It’s not really called Bank of Dave, despite Fishwick’s best efforts. It’s the Burnley Savings and Loans and it will stay that way until City regulators, who have approved only one new bank in the last 100 years, give the 41-year-old a banking licence.
6. The idea for the ‘bank’ came when Fishwick’s customers were no longer able to get loans from their banks, which almost ruined Fishwick’s minibus firm. His own firm’s balance sheet was fine but the small businesses who make up most of his buyers found they could no longer obtain finance. “All of a sudden it just stopped. The banks wouldn’t lend money to my customers. The customers weren’t doing anything differently and were still able to repay. It was the banks that were having problems.”
7. So Fishwick started lending his own cash to minibus buyers. After six months, and with not a single customer defaulting on their payments, he decided that running a bank couldn’t really be that difficult.
8. Regulators told Fishwick that he needed to keep a minimum of £10 million in reserve. He managed to open for business in September 2011. So how did he do it? He rented a shop for under £100 a week and he gave his time for free, as did local people who helped paint, decorate and furnish the branch. Above the entrance it says ‘Bank on Dave!’ but it’s an advertising slogan, not the firm’s legal name.
9. As his website explains: “You lend your savings to a borrower and that borrower then becomes responsible for the paying of the loans. Burnley Savings and Loans does the administration around this and is responsible for checking the customers who want loans.”
10. Savers are allowed to lend from £50 to £1,000 with 30-day’s notice or up to £15,000 with one year’s notice. There’s no protection through the Financial Services Compensation Scheme so savers have to rely on Fishwick. Every £1 put in, he personally guarantees. In other words, he puts down £1 of his own cash for every £1 brought in by a customer.
11. “We’re all about helping real businesses. I had an accountant who came to us needing to borrow £10,000, as he was buying his partner out. Yet, even though it meant his income would rise and his record was perfect, the banks wouldn’t lend him the money. So we did. If a local accountant in Nelson (Lancashire) can’t borrow from a bank, what hope does Mark the builder or Gary the plumber have?”
12. “This is not about trying to be bigger than the banks or about putting money into my pockets. Someone, somewhere has to take the first step and take them on,” said Fishwick. He dreams of many more independent savings and loans across the UK. “Other people up and down the country can do the same as me. We could have something like Burnley Savings and Loans in every community. You just need like-minded individuals to come together.”