The British Business Bank has called for alternative finance lenders to apply to be part of a referrals programme to help small businesses obtain finance.
Under the terms of the new referrals initiative, ten major banks will be obliged to offer any business whose loan application they have rejected a referral to a choice of new online platforms.
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These online platforms will put referred businesses’ requirements in front of a range of alternative finance providers, who will have the opportunity to offer them the finance they need.
Applications are now open for those interested in providing the online platforms.
Keith Morgan, chief executive officer of the British Business Bank said: "Smaller businesses will have a greater choice of provider and chance of securing finance, alternative providers will have access to a bigger market of potential clients, and the major banks will be able to offer an additional service to those they initially turn down."
British Business Bank’s latest ‘SME journey towards raising external finance’ report found that two thirds of SMEs only go to one provider when seeking finance and 38% of businesses appear to give up their search for finance and cancel their spending plans after their first rejection.
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By GlobalData
