Firms Rejected For Loans Will Have Applications Passed On Under New Bank Referral Scheme

Small businesses who have been rejected finance by banks, can have their applications passed on to rival lenders in a new government-led referral scheme.

Launching this week, the Bank Referral Scheme was originally announced back in 2014 by then chancellor George Osborne and aims to increase both traditional and alternative finance options available to small businesses.

Currently, the ‘big four’ of Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland Group provide 80% of loans to small businesses – suggesting there is room for more alternative lending in the small business space.

Nine banks will be required to give businesses, who’ve had their loan request denied, the opportunity to have their applications passed on to either Funding Xchange, BusinessFinanceCompared or Funding Options.

Rob Straathof, CEO of Liberis, said.

“Small businesses are vital to creating jobs and growing the economy, yet many still struggle to get loans through traditional providers like banks.

“We hope this move will help bridge the gap between traditional and alternative methods of finance, helping small businesses understand the array of different options available to them to grow.

“The alternative funding sector is growing rapidly, and we will continue supporting small businesses currently underserved by banks.”