The government’s Bank Referral Scheme was launched in November 2016. The scheme was created by the Small Business, Enterprise and Employment Act 2015 and is designed to help improve SME access to finance and competition in the SME lending market. Securing credit to grow is often a barrier for small and medium sized businesses.

The bank referral scheme imposes a statutory duty on nine of the UK’s biggest banks to pass on the details of small businesses that have been unsuccessful in applying for finance to three Government designated alternative finance platforms.

The three finance platforms are the Alternative Business Funding, Funding Options and Funding Xchange. These platforms are, in turn, required to share their details with other alternative finance providers to help small businesses access much needed finance not available from mainstream banks.

New figures published by HM Treasury have revealed that that over the past 12 months, 889 businesses have raised more than £23 million through the Scheme. This is a significant increase on the previous year and the initiative, introduced four years ago, has now raised £56 million for businesses all over the UK.

Source: New feed