New Matchmaking Service for Small Businesses Looking for Finance
From 1 November 2016, nine of the UK’s biggest banks will pass on the details of small businesses they have rejected for finance to three finance platforms – Funding Xchange, Business Finance Compared and Funding Options.
These platforms will then share these details with alternative finance providers and go on to facilitate a conversation between the business and any provider who expresses an interest in supplying finance to them.
These new rules make it easier for businesses to access finance when they have been turned down by traditional lenders. RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust Bank, will all have to offer access to these finance platforms, with small business having to give their permission before their details are shared.
Research shows that 71% of businesses seeking finance only ask one lender and, if rejected for finance, many simply give up on investment rather than seek alternative options. Last year 324,000 small and medium sized business sought a loan or overdraft, 26% of these were initially declined by their bank and only 3% of those declined were referred to other sources of help.