Small firms get second chance to secure loans
REJECTED small business loan applications will be offered around alternative lenders, under plans announced by the chancellor yesterday, so the firms have a better chance of getting credit.
It comes after SMEs complained it could take a damagingly large amount of time and effort to apply to lender after lender for a loan.
The consultation will look at the type of loan which will be referred to other lenders, the conditions under which the application should be offered around the market and whether alternative lenders meet small firms’ needs.
It comes as the British Chambers of Commerce and the Federation of Small Businesses launch a new programme to survey banks’ treatment of SMEs.
The Business Banking Insight is intended to rank banks against key indicators which will help small firms work out the best way to get finance, as well as acting as a competitive spur to improve big banks’ operations.
“Access to finance is absolutely critical to our members and we believe there is a clear need for improved banking services and increased trust between businesses and banks,” said the FSB’s John Allan.