BANK REFERAL SCHEME WILL SOW THE SEEDS OF A BUSINESS FUNDING REVOLUTION
August 31 2016.



According to figures from the British Business Bank, approximately 100,000 small and medium business finance applications are declined by banks each year, which is one of biggest drivers for the introduction of a bank referral scheme. Boost Capital's Alex Littner outlines what SMEs can expect with the scheme coming into effect...


In August 2014, the former Chancellor George Osborne announced plans to introduce a bank referral scheme matching SMEs rejected for bank lending with alternative providers keen to do business with them.

Now, two summers, one raft of enterprise legislation, and a change of personnel at the top of government later, and this potentially revolutionary scheme will soon come into being.

And the ramifications for small firms – as well as the altfi industry that serves them – will be great.

Time for change
It’s not before time, since small businesses continue to face barriers when trying to gain access to finance, both from the banks – as highlighted in the recent Competition and Markets Authority (CMA) investigation into retail banking– and from a lack of awareness on SMEs’ part of new funding options available through fintech channels.


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