16/02/2015 08:49 GMT | Updated 14/04/2015 06:59 BST

Last Chance for Businesses to get Compensation for Loan Mis-selling from Banks

Time is running out for small businesses to claim against banks for that other scandal: Being mis-sold sophisticated "hedge" arrangements to protect loan repayments against interest rate rises.

But the compensating cash is not. Banks still have a great deal of money set aside to cope with claims arising from the scandal, which left many small enterprises saddled with inflated repayments.

Not only did banks often make the hedging arrangements a condition of their loans, but they made it punishingly expensive to repay the money early or to end the repayments.

No wonder the Financial Conduct Authority (FCA) stepped in nearly three years ago, although not, it seems, with enough energy to ensure compensation reaches those entitled to receive it.

What is surprising, as the 31 March deadline to make a claim looms, is that 6,000 customers needlessly sold these so-called Interest Rate Hedging Products have yet to complain out of 7,000 deemed eligible by the FCA.

This is a shaming failure of communication, partly stemming from no requirement on banks to contact all the people to whom these products were sold, only some.

Inertia from the banks is perhaps only to be expected, and less than half the £4.4 billion set aside for claims has been paid. They have hardly covered themselves with glory over this further example of their mis-selling generally, amid a suspicion that they have been wilfully slow to make compensation arrangements. About 3,000 customers already in the process have yet to accept an offer, which certainly suggests some problems.

It hardly helps that the procedure for getting money itself is less than perfectly structured. Independent reviewers assess the individual claims. But the word 'independent' comes rather compromised in this context: They were chosen by the banks themselves.

The investigative work has, of course, gone mainly to the Big Four accountancy firms, with which the banks do most of their business - not the most reassuring way to avoid fear of a conflict of interest.

There has also been talk of the independent reviewers refusing claims, but not with enough information for an appeal to be mounted. The banks have also hired armies of expensive lawyers, hardly the warmest approach to those they are purportedly committed to compensate.

In theory, each successful claimant is offered redress, plus eight per cent interest on the money they spent. They can also claim for more specific consequential losses to their business if the eight per cent is deemed inadequate. This covers areas such as litigation fees, bank charges, loss of profit or interest , and compromised expansion opportunities that followed from being deprived of the cash.

With so little time to claim the compensation, at least without having to do so independently and much more expensively through the courts, it is important to act now.

A first step is to examine loan arrangements entered into with high street banks between 2001 and 2010, looking particularly for reference to 'swaps' 'caps' and 'collars'. It is quite possible they were bought unwittingly, particularly as bank employees were heavily incentivised to sell them.

The next stage if something turns up is to contact either an appropriately qualified lawyer or a forensic accountant. They will have the experience to assess whether the standard eight eight per cent is enough by working out what the consequences to your business have been from the loan.

Another reason to seek outside advice is that the redress system itself is complex. Perhaps it comes as no surprise that many banks have been offering customers new products as an alternative to cash, which in other circumstances might be comic.