Starting today, November 1 2016, small businesses that have been turned down by banks for finance will be put in touch via approved brokers with alternative options for finance.
It has been estimated that 25% of small businesses are turned down for loans and overdrafts by the banks and the March 2016 budget introduced measures that should help them.
As part of a package that builds on the Bank Referral Scheme announced in 2014, the government said it would match small businesses who couldn’t get bank finance with alternative finance providers.
The scheme extends the Government’s loans programme, the Enterprise Finance Guarantee, to March 2018 and will support lending of more than £250 million per year.
The Government said it would designate finance platforms Bizfitech, Funding Options and Funding Xchange as brokers for the scheme under the SME Finance Platform regulations, following advice from the British Business Bank.
These platforms will match smaller businesses that have been declined for finance by designated banks with alternative finance providers to help them access the finance they need to grow and expand.