A new government scheme to help small businesses turned down for loans find alternative means of finance launches today.
Under the Treasury's bank referral scheme, RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust Bank will be obliged to offer to pass on details of businesses they are declining to three finance platforms – Funding Xchange, Business Finance Compared and Funding Options.
These platforms will then help the businesses get in touch with a provider of alternative finance.
"Small- and medium-sized businesses are the backbone of Britain’s economy and it is right they have access to a wide range of sources of finance," said chancellor Philip Hammond. "A refusal from a big bank should not be the end of the line for a small business and, thanks to the finance platforms being launched today, now it won't be.
"We are determined to maintain the prosperity of our business sector and to support an environment where small businesses can grow and thrive."
Mike Cherry, national chairman of the Federation of Small Businesses (FSB), added:
Small firms struggling to access finance will now automatically have a new way to get the support they need to invest and grow. FSB pushed hard for these reforms, and today's announcement is good news as the government delivers on them.
Conrad Ford, founder and chief executive of Funding Options, commented:
For decades, UK governments have fretted that most firms only approach their bank when seeking finance, and then give up if rejected causing untold economic harm. Business owners are busy people, and it's only recently that online solutions like Funding Options have emerged to navigate the complex alternative finance market.