Small businesses that have been turned down for a business loan can now take advantage of a new government scheme aimed to help them find alternative finance.
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How does the Treasury’s small business finance system work?
Under the new bank referral scheme, if a business has been turned down for a loan, most major banks are now obliged to pass on their details to one of three finance platforms - Funding Xchange, Business Finance Compared or Funding Options.
It’s then up to those platforms to help the business owners find alternative forms of finance by putting them in touch with providers.
Banks included in the scheme are RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust Bank.
The Federation of Small Businesses support the scheme
“Small firms struggling to access finance will now automatically have a new way to get the support they need to invest and grow.” Said Mike Cherry, national chairman of the Federation of Small Businesses, adding that the FSB had pushed for the scheme to be implemented.
Chancellor Philip Hammond announced his support of small businesses as the scheme launched, calling them the ‘backbone’ of the British economy and saying that failure to obtain finances the traditional way shouldn’t be the ‘end of the line’.
Have you struggled to secure financial backing for your business? Let us know in the comments.