Small business owners would have easier routes to alternative finance under new proposals announced by George Osborne.
Speaking to the Federation of Small Businesses, the Chancellor launched a consultation on new rules that would help direct SMEs to alternative finance providers when they are turned down for a business loan.
Under the proposals lenders could be forced to release details of unsuccessful loan applications in order that small businesses could be paired with potential alternative lenders.
The government reportedly wants to eventually see the establishment of many more alternative finance platforms.
Mr Osborne told delegates: “The success of small and medium-sized businesses is key to the government’s long-term economic plan. That’s why we are fully focused on making sure businesses can get the finance they need to grow and create jobs. This includes actively supporting innovative new forms of business lending.
“We’re setting out new proposals that will help match up other lenders with small businesses that may have been turned down for a loan by a large bank. A big bank saying ‘no’ should not be the end of the line for a small business. Now, with our plan, it won’t be.”
Labour leader Ed Miliband also spoke at the conference, and pledged that a Labour government would establish a “US-style Small Business Administration” to safeguard the interests of SMEs.