The announcement from George Osborne that legislation will be introduced so that banks match SMEs that have been rejected for loans with alternative finance providers, comes as no surprise to us, but is hugely welcome nonetheless.
From the outset, the principle behind our collaboration with other alternative funders was to provide a simple and safe journey for businesses to access quality alternative funding if they were not able to, or did not wish to, obtain finance from a main bank.
Our alternative business funding portal has been an outstanding success already, with thousands of businesses having already passed through the site to an appropriate funder. But, it was always designed to exist in an environment where banks and other significant credit providers were required absolutely to signpost rejected SME owners to the now vibrant alternative funding sector.
The confirmation from The Treasury that our initiative will, indeed, pass into legislation is both sensible and pragmatic.
What we are seeing is the first steps of a journey which will, ultimately and permanently, change the way small business owners access finance for growth going forward.
This is a very positive move for the economy and Clifton are proud to have played such a significant part in this and look forward to continuing our close work with The Treasury to ensure that what is finally delivered is simple, fair, transparent, but most of all gets real results.
In his statement George Osborne said: “Today I can announce that as part of the first ever Small Business Bill going through parliament, this government will legislate to require the big UK banks to pass on information on small businesses they reject for loans, so that FinTech companies and alternative lenders can step in and offer finance instead.
“So often a small business will be suitable for finance, but 70% only approach one bank and nearly 40% give up at the first attempt. Meaning many businesses just don’t get the finance they need.”
Great news indeed!