Santander announced yesterday that small firms that failed to get credit from them would have their loan applications forwarded to peer-to-peer lender Funding Circle.
The government is pushing all banks to create a scheme to refer rejected applications in a bid to find a lender who will offer credit to businesses.
But this deal pre-empts the national agreement.
“SMEs need access to multiple sources of finance, and Santander's partnership with Funding Circle is a good example of how traditional and alternative finance can work together to help the nation’s SMEs prosper,” said Santander’s UK chief Ana Botin.
“Peer-to-peer financing is also a useful way to introduce people to the concept of investing in entrepreneurs; an important element in a healthy enterprise economy.”
Santander has expanded its business lending, and has tried to establish itself as a wider partner of SMEs rather than working solely on a traditional banking relationship.