Alternative finance options for small businesses

Under a new government scheme, nine of the UK’s major banks will offer small businesses more finance options.

This new initiative will see the details of small businesses passed on to finance platforms by big banks that have rejected them for finance.

Easier

HSBC, RBS, Barclays, and Lloyds are among the banks which will offer small businesses access to the following finance platforms: Funding Options, Business Finance Compared, and Funding Xchange.

The scheme will make it less difficult for small businesses that have been rejected by conventional lenders to access finance, as well as allowing major banks to offer an extra service.

According to research, over 70 per cent of businesses ask just one lender when seeking finance, with many giving up hopes of investment when they are rejected rather than searching for alternative options.

In 2015, 340,000 businesses sought finance from their bank, with 26 per cent being rejected and just 3 per cent of those rejected being given access to alternative options.

Potential

British Business Bank CEO Keith Morgan said: “This new government initiative, supported by the British Business Bank, has the potential to make a real difference to smaller business finance markets in the UK.

“It gives businesses additional opportunities to secure funding, alternative providers access to a bigger market of potential clients, and major banks an extra service to offer their business clients when they cannot themselves provide finance.”