Forklift truck training firms benefit from bank referral scheme

According to HM Treasury, 230 small businesses that were rejected for loans by some of the UK’s biggest banks, have gained £3.8 million from alternative lenders in the past nine months. Loans have ranged from £200 to £500,000 with multiple sectors benefiting.

The 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 FLT training firms have received the money that they need to grow and we expect this number to increase as the scheme matures.”

The bank referal scheme was launched in November last year and requires nine of the UK’s biggest banks to pass on the details of small businesses they have turned down for loans to three finance platforms – Funding Xchange, Business Finance Compared and Funding Options.

These platforms then share their 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. A fourth finance platform, Alternative Business Funding, is also joining the scheme this November.

Mike Cherry, national chairman of the Federation of Small Businesses, said: “FSB championed the proposals for a mandatory bank referral scheme, to diversify the lending market and boost the provision of alternative finance to those turned down by the main traditional banks.

“We welcome that government has delivered the three platforms and congratulate the scores of firms that have benefited in the scheme’s early stages. To provide further economic benefit across the UK the scheme must now scale-up, with more referrals and more businesses successfully securing finance as a result.”