Chancellor Announces More Help for Small Firms Rejected for Business Loans
Firms to benefit from easier access to loan providers
Chancellor George Osborne has unveiled proposals designed to make it easier for small businesses to find alternative loan providers.
Over half of SMEs seeking finance for the first time get rejected, and research suggests most of them do not try again. Speaking at the Federation of Small Businesses’ (FSB) 40th anniversary conference, the Chancellor announced a consultation which asks whether the government should legislate to ensure lenders release information on small businesses they reject for finance.
This would allow alternative lender to identify and approach viable firms; the aim is for this to take place via new online platforms.
George Osborne said:
“We’re setting out new proposals that will help match up other lenders with small businesses that may have been turned down for a loan by a large bank. A big bank saying ‘no’ should not be the end of the line for a small business. Now, with our plan, it won’t be.”
John Allan, National Chairman, Federation of Small Businesses, said:
“Accessing finance is essential for small firms to invest and grow. Recent years have seen those firms struggle to get hold of the finance they need. While lending to small businesses is dominated by the big five high street banks, today’s announcement could help businesses find alternative lenders and introduce more competition into the market.”