When it comes to raising finance from traditional lenders on the high street, many small businesses can hit a dead end. A new government initiative designed to address this problem – the Bank Referral Scheme – has made a promising start.
The Bank Referral Scheme was launched in November 2016. Effectively a business finance ‘matchmaking’ scheme, the initiative aims to give small businesses who are turned down by the large high street banks access to an alternative panel of lenders.
The banks that have signed up to the scheme can provide unsuccessful applicants with a ‘next step’ by circulating their details to four funding platforms. These in turn can put them in touch with alternative finance providers. According to figures recently released by the Treasury, the scheme has already enabled some 230 small businesses to access the funding they needed.
You can read more about the initiative in this article: New bank referral scheme opens doors
“Over the past 9 months, 230 small businesses, from beauticians to forklift truck training companies, which were rejected for loans by some of the UK’s biggest banks, have gained £3.8 million from alternative lenders,” the Treasury reports.
The British Bankers’ Association has published a useful factsheet: Understanding Bank Lending Referrals to Finance Platforms which provides more information about the eligibility criteria and the process.