Small businesses turned down for loans from the UK’s high-street banks have received over £15 million of funding through a government scheme since its introduction.
Over the last 12 months, almost 700 businesses raised £12 million through the Bank Referral Scheme. More than £15 million of funding has been released since the scheme’s introduction in 2015.
The Bank Referral Scheme was created to help improve SME access to finance and competition in the SME lending market. The scheme requires 9 of the UK’s biggest banks to pass on the details of small businesses they have turned down for finance to three Government designated finance platforms: Alternative Business Funding, Funding Options and Funding Xchange.
These platforms share the businesses’ details with alternative finance providers, helping to facilitate a conversation between the business and any provider who expresses an interest in supplying finance to them.
The scheme was introduced because evidence shows that SMEs often give up seeking finance if rejected by their main bank.