FSB has secured a major boost for small businesses seeking funding, after the Government announced that nine UK banks must now share details of any SME rejected for loans to three funding platforms with non-traditional lenders.
The new rule means small business owners should find it easier to secure alternative funding options after they have been rejected by the traditional money-lenders.
Small businesses have to give permission before RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust Bank can share their details.
Three platforms - Funding Xchange, Business Finance Compared and Funding Options – will then help with access to alternative finance providers, forging a link between the small business and the new potential lender.
Mike Cherry, National Chairman, Federation of Small Businesses, said: “Small firms struggling to access finance will now automatically have a new way to get the support they need to invest and grow. FSB pushed hard for these reforms, and today’s announcement is good news as the government delivers on them. This change will boost alternative lenders, bringing more competition and choice in the market beyond the big banks.
Philip Hammond, Chancellor of the Exchequer, said: “Small- and medium-sized businesses are the backbone of Britain’s economy and it is right they have access to a wide range of sources of finance.
“A refusal from a big bank should not be the end of the line for a small business and, thanks to the finance platforms being launched today, now it won’t be.
“We are determined to maintain the prosperity of our business sector and to support an environment where small businesses can grow and thrive.”