The Treasury has introduced a new government initiative that is designed to force banks to refer to SMEs (Small and Medium-sized Enterprises) to alternative lenders, should they fail to secure finance. Any SME that is unable to secure the necessary funding must now be referred to other providers of finance, such as crowdfunding platforms and asset-based lenders.
Alternative funding for small businesses
Once the scheme is implemented, nine leading banks will legally have to refer all unsuccessful applicants on to a pre-approved list of alternative lenders. Banks have previously been criticised for failing to support small businesses with sourcing alternative forms of finance. Despite the importance of small businesses, and their role in creating jobs and growing the economy, they can still struggle to gain financial support from banks. Over recent years there has been an increase in the number of alternative finance providers and it is hoped that this scheme will bridge the gap between traditional and new forms of finance. It is estimated that between 150,000 and 250,000 small and medium businesses are rejected for funding each year. It is hoped that this new initiative, and the increasing funding options available to SMEs, will support new businesses and reduce the number of UK organisations that face Insolvency and Liquidation.
Get in touch with The Insolvency Experts for SME advice!
The Insolvency Experts offer professional and expert financial advice to businesses of all sizes. If you’re an SME that is facing business debt, cash flow problems or funding issues, we can help. We understand how stressful it can be to face financial issues, but our friendly and knowledgeable team can offer advice to suit your specific situation. For more advice on liquidation, business debt and insolvency, please get in touch with The Insolvency Experts now. Contact us online or call us directly on 0300 303 8284 and we’ll be happy to answer any questions you have.