Funding news - 11/08/2017
Government-backed Scheme Facilitates £4 Million of Business Lending
A Government-supported programme has seen millions of pounds awarded to loan-seeking businesses in the UK that have encountered problems accessing finance through traditional means.
According to HM Treasury, many small firms across the UK that have experienced difficulties in accessing finance through large bank providers have received nearly £4 million of funding through an innovative lending programme during the course of this year.
Since the end of 2016, 230 small businesses that have been rejected for loans by some of the UK’s biggest banks have been awarded £3.8 million from alternative lenders. The government-backed bank referral scheme requires nine of the largest banks to pass on the details of small companies for whom that have refused loans to three finance platforms – Business Finance Compared, Funding Options and Funding Xchange. These platforms share details with alternative providers of finance and begin a conversation between the business and those providers that are keen to supplying alternative finance.
Speaking about the initiatives, Economic Secretary to the Treasury, Stephen Barclay, 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 our match-making scheme they have another avenue to try for funding.
"Over 200 businesses from beauticians to forklift truck training firms have received the money that they need to grow and we expect this number to increase as the scheme matures.
Loans resulting from this scheme ranged from £200 to £500,000, with an average size of £16,000. A number of sectors have benefited including construction, retail, technology and science.
‘Alternative Business Funding’ will become the fourth finance platform to join the in November 2017, widening the options available to businesses further. The government will continue to work with banks to embed and improve their referral process.
Source: HM Treasury, 11/08/2017