Small firms that have been refused finance by nine of the biggest banks in the UK will have the opportunity to secure funding from alternative providers with the aid of a new matchmaking service.
Firms rejected for finance by RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank or First Trust Bank, can authorise the bank to pass on their details to finance platforms funding Xchange, funding Options and Business Finance Compared. These platforms share information with other providers that may be willing to provide funding.
Around 70 per cent of firms that apply for finance only approach one lender and rarely seek other options if rejected. In 2015 around 324,000 smaller firms applied for finance and while 26 per cent of applications were rejected, only 3 per cent were referred to alternative providers.
Keith Morgan, CEO of the British Business Bank, said the initiative could potentially make a considerable difference to smaller business finance markets in the UK by widening market opportunities for alternative finance providers, enabling firms to access alternative sources of finance and enabling banks to offer business customers another service when they cannot provide them with funding.
There is more information about the scheme at:
This article originally came from the FSB magazine.