Finding a lender just got easier for SMEs
You could be forgiven for thinking the UK is an economy comprised of banks. They’re always in the headlines. Things didn’t go to well for them in 2008. And, they’ve made their feelings on Brexit pretty clear!
But the reality is the UK is actually a nation of small businesses; not big banks. SMEs account for almost 99% of UK’s businesses, and employ about 60% of the workforce.
And this month the HM Treasury announced a smashing initiative to help the nation’s SMEs find finance: the Bank Referral Scheme. A boring name for a great idea!
Why do we love this?
Well it’s simple. Research we commissioned told us SMEs want to grow. And, their single biggest hurdle to growth: getting financed. And the Bank Referral Scheme makes the process for businesses of all sizes to find finance at lot simpler and easier.
How does it work?
First, your business approaches a participating bank for an eligible lending facility. If your loan is approved, great!
Second, if your loan isn’t approved, that bank must automatically offer you a referral to an online platform (like fundingxchange) who may be able to help you find that finance. If you agree to it, the bank must pass your information to the platform.
Third, the platform then invites all of its lenders to review your application and make indicative offers to fund you. Some platforms have up to 50 lenders, ranging from the majors high street banks, to non-bank specialist lenders, to peer 2 peer providers. And businesses that have been declined for funding by a typical bank are often attractive to many finance providers who look at creditworthiness in different ways from that bank.
Is there a catch?
No. There’s no catch. No pressure selling. No selling your information. And, there’s no cost to the business for using the platforms.
Want to know more? Go to British Business Bank.
And when you’re done comparing finance options, compare the best prices for business electricity or gas at energy-scanner.com