Small businesses turned down for loans from the UK’s high-street banks have received over £15 million of funding thanks to a government matchmaking scheme.
Over the past 12 months, 670 businesses have raised over £12 million of funding through the Bank Referral Scheme, four times what was raised in the previous year. Since it was introduced in November 2016, more than £15 million has been sourced for businesses across the country.
The Bank Referral Scheme requires Britain’s biggest banks to pass on the details of small businesses they have turned down for loans to online credit brokers. The brokers then help those businesses to source funding from alternative, and often smaller, lenders.
Rejected businesses are now automatically offered the opportunity to be referred to three online credit brokers: Alternative Business Funding, Funding Options and Funding Xchange. Each platform provides access to a range of lenders and products, including business loans, revolving credit, asset finance and invoice finance. Loans resulting from the scheme ranged from £100 to £1.3 million and the average size of a loan secured was £17,285.
