The bank of Jeremy Kyle?

Whilst our world leaders grappled with the Eurozone crisis, I can safely say that I enjoyed a full and enjoyable weekend. I did, however, take time out to contemplate the parallels between pubs and banks - in particular at the start-up stages.

As any seasoned publican will tell you, when a new  and inexperienced licensee comes to town (particularly to a town centre pub), they will inevitably have several waves of customer before - hopefully - finding the clientele they were actually looking for.

The first, and least desirable wave of customers will be those who are banned from every other pub in town - drunks, drug dealers, fighters and generally those people who will drag you to your knees without careful management. With the best will in the world, as a newcomer to town - and to the industry - you might struggle to identify these people. The heavily tattooed bruiser who looks very dodgy could turn out to be your best and nicest customer, whereas the well-spoken chap in a suit might turn out to be the local drug dealer and loan shark. Besides, you have a business to run and cash in the till is better than no cash, surely?

Your second wave will be regulars in other town pubs. Their visit will be mainly inquisitive though they might be swayed if they like what they see. These people often move in groups, so you might well end up becoming the favoured establishment bikers, students, or, indeed train spotters. This of course can have its own advantages and disadvantages.

Finally, you can work on developing your target audience; except that you are unlikely to attract the fine wine and gastro brigade if your bar is like the Green Room at the Jeremy Kyle show.

A seasoned publican will have developed a personal sense for good and bad clientele; whilst not unerring he will be reasonably in control and sufficiently astute to act swiftly with problem customers.

Similarly, a local person will often know who to avoid by face, name and reputation.

And so to banks - or finance companies.

The moment you announce that you have £x million to lend to XYZ customers, a queue will form at your door.

At the head of the queue will be those who have been declined for finance elsewhere. Many will be honest and decent and will come across well, but will still represent a higher than average risk to your business (think of the affable customer, who just always has a bit too much, picks a fight and is sick on the carpet); others will be blatant fraudsters whilst others will just be chancers and nutters.

When that queue has subsided, you will be visited by those who have alternatives but are commercially astute and are interested to see what you can provide. Ultimately you will only get their custom if you have something of value to offer.

Finally, you can establish your market niches and develop relationships and knowledge within your chosen sector from which - if you have not been drowned in bad debt first - you can grow a successful finance business.

George Osborne has yet to reveal any detailed plans for 'credit easing' for small, business, though he has indicated that ultimately he would like to bypass the main banks and has used the term 'Small Business Bank'. My personal instinct is that it won't be a bank in any meaningful sense of the word, but something more akin to a 'pop-up-shop' type of finance company.

The genuine concern is that, in by-passing the banks, this 'Small Business Bank' will be every inch the new publican in town. There is little or no evidence that the people behind the plan have any real comprehension of business, lending, bad debt or, indeed the inevitable fraud that they will be faced with.

Presumably they will bring in some big names and advisors who can provide intelligent input but still won't have been at the coal face for some time. Besides, they will be thwarted by the entirely mixed motivation for this venture.

In the pub / bank analogy, the one big discrepancy is price - low cost finance will attract good quality business, whereas 2 steak and chips for a fiver is unlikely to appeal to fine diners. The more direct link is between pub prices and bank underwriting; set your prices high and you will drive away a portion of the bad clientele; set your underwriting standards high and you will weed out many of your potential bad debtors. The problem here is that you will be directly in competition with the banks (who are still lending to their best customers) and other organisations like Peer-to-Peer lenders and private finance companies. Ultimately, your Business Bank will add very little to what is already available.

Besides, the key here is to help struggling business. You can't sell prime fillet steak at 2 for £5, and you can't lend to sub-prime credits at prime interest rates - bad debt is the cancer of business, and never more so than to a finance company. Good gate-keeping and significant knowledge and experience can keep this under control, even in a sub-prime environment, but naivety and lack of management control will bring the thing toppling down quicker than a house of cards.

So, my message to George Osborne; small business will welcome some relief, but Government has neither the experience nor the commercial acumen to operate a bank - you will swiftly become the Bank of Jeremy Kyle.

You can save the taxpayer a lot of money by using the resource already available - established banks and finance companies. Revisit the EFG - re brand it if you must, but  above all, make it workable, transparent and actually a guarantee (as opposed to a carefully wrapped PR exercise) - your easing could then be on the market now, when it is needed, rather than some time next year.