Eighty five per cent of small business owners think the Government's new referral initiative mandating banks to signpost rejected customers to alt-fi providers is key to the future success of the small business sector, according to new research by One Poll for Liberis. The survey of 1000 SMEs found that 63% believe it will lead to more businesses getting funding and 45% think it will create a more competitive SME funding marketplace. However, 48% of respondents think the new law will make funding more expensive for businesses, whilst 37% think it will effect cheaper funding. Other perceived benefits by the majority of SMEs are easier and quicker access to funding and that more businesses will grow.
Under the terms of the new law, ten major banks will be obliged to offer businesses they turn down for a loan a referral to alt-fi providers via new online platforms. The closing date for expressions of interest from potential finance platforms is on Thursday (30th April) and the British Business Bank, which is managing the scheme, will make its recommendations to HMT on those considered suitable to be in the running. A final decision on designated platforms is expected between September and December 2015.
Says Paul Mildenstein,CEO of Liberis, "A great deal has been accomplished lately towards helping small businesses access funding. It's crucial that the momentum of this initiative is not derailed or slowed down by any new government, whatever its makeup. Whilst small businesses need it quickly, the success, or failure, of this scheme will be down to effective implementation of a well thought out process. It must be monitored and measured by the British Business Bank, who must be given the muscle power to make sure everyone collaborates as they should."
