Banks to be forced to refer rejected businesses to alternative funders

George Osborne recently announced that the Government will introduce new rules to force banks to offer to refer rejected business customers to alternative funders. Under the new rules businesses will be referred to challenger banks and alternative funders such as crowdfunders, P2P lenders and invoice financiers.  Osborne said “It’s only by harnessing innovations in finance, alongside our existing world class knowledge and skills in financial services, that we’ll ensure Britain’s financial sector continues to meet the diverse needs of businesses and consumers here and around the globe, and create jobs and growth”.

The Treasury is now expected to form a working group to establish exactly how the process will work and which platforms will be included.

Banks were thought to have opposed the move but the executive director at the British Bankers Association said “The banking industry fully supports efforts to help match business rejected for finance with other lenders.  In fact many banks already run programmes that refer businesses unsuited to bank finance to a range of alternative providers.”

The alternative funding industry is estimated to have almost doubled in size to £1bn in 2013 and is projected to grow to £1.6bn this year.

At Finton Doyle, we often meet with SME’s who have been turned down by their banks for funding, we therefore ensure that we know about the alternative funders that are out there so that we can refer clients to alternatives.  For more information about funding in Lancashire please visit our website.

This site uses cookies. Privacy Policy

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.