ACCA RESPONDS TO ALTERNATIVE BANK LOAN PLANS
September 10 2014.


The government intends forcing banks to promote alternative lenders when they can’t provide funding themselves. Some believe that it will also go a long way towards publicising the wide range of options that are available to firms, some of which aren’t so well known to SMEs.


The ACCA thinks that “the idea of a referral system is a good one and, if executed properly, could be a major benefit to SMEs in the UK, but strict safeguards will need to be in place in the legislation when it is published. A poorly designed referral scheme could risk labelling participating SMEs as sub-prime borrowers, inviting a lower quality of credit provider, and encouraging irresponsible lending practices or discourage good practices within existing banking relations.”

The proposal is seen as a means of countering the potential anti-competitive impact of the appeals process, which essentially gives banks a second chance to hold on to unsatisfied customers.

The government’s latest view on the subject is available HERE.