The UK Treasury is to review the SME referral scheme set up for nine high street banks after there was poor take up of the scheme, as seen in the news section on page 6.

RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust are all part of the scheme.

According to sources I’ve spoken to, the designated platforms – Funding Options, Funding Xchange and Bizfitech – are struggling to get the referrals in from the nine banks.

The reasoning for this includes the low rate of rejections (around 10%), the desire of the SME to fix a solution themselves, and questions around data security and integrity.

Unlike in the US, where failure is seen as a precursor to success, British business tends to run more on conservatism and the ‘pride principle’. SMEs might not want to make it public knowledge that they have been declined credit.

And from the lessor’s point of view, it was always going to be a risk trying to get a bank to refer businesses that it turned down credit to in the first place.

There is a reputational issue too – banks do not necessarily want to promote another business to customers who might have other needs in the age of multi-channel banking.

Additionally, the alternative finance market’s profile, and its size, has risen considerably in the past two years since the Small Business Bill passed through Parliament.

When you add to that a wave of online resources, from the mainstream outside the leasing product, to asset finance specific sites, there are plenty of options for SME decision-makers seeking finance from their homes.

Midlands Asset Finance, LDF and former NACFB chief executive Adam Tyler have all launched sites that offer quick quotes on equipment leases.

No doubt there will be more sites to come in the future as the market requires a product that fits the way they want to engage with their funder.

Russel Griggs, who is the chosen reviewer of the scheme by the government, will have to figure out not only usage of the scheme but also its validity.

EIB funding

Breaking news as this issue went to press: the British Business Bank has asked the government to step up its commitment to replacing the European Investment Bank investment in small business that could be lost as a result of Brexit.

Why this was not pledged before the referendum is unclear – perhaps it was too long to fit on the side of a battle bus.

Whichever government takes power will have to continue to support SMEs and their funders in order for our post-Brexit economy to be a success.