SMEs Should Push For Alternatives
5th December 2017.
New figures have found that banks are not doing enough for small businesses once they’re turned down for a loan.
Under the Government’s bank referral scheme, Britain’s biggest lenders are required to pass on the details of any small businesses they turn down for loans to alternative finance platforms. New figures from the Sunday Times suggest this scheme is not going far enough.
According to Peter Evans from The Sunday Times, a mere 230 businesses with about £4 million in loans, were aided by the bank referral scheme in its first nine months. Critics say the banks do not let loan applicants know they have alternatives early enough. Planning ahead can help small companies improve their chances of finding an alternative.
“Business owners should start conversations with banks by asking what the options are if they are turned down,” said Adam Tavener, chairman of Alternative Business Funding (ABF).
“You don’t want to find yourself in a situation when it’s win or bust.”
ABF, which helps firms find alternative sources of funding, is one of the designated platforms to which banks can refer businesses. The others are Funding Options, Funding Xchange and Business Finance Compared. All match small businesses with finance providers.
For companies to be referred by the banks, they must agree to their details being shared. They can also choose to appeal a bank’s decision. Appeals have led to about a quarter of decisions being reviewed and financed by the banks in the end, according to the trade body UK Finance.
Here at the Credit Protection Association, we offer advice and swift action for businesses struggling with bad cash flow. With our dedicated litigation and collection team we can relieve your business of bad debt or late payers, and free you up to fund future business ventures without going near a high street lender. Please get in touch if you would like to find out more!
Please call us on 0330 053 9263 to discuss how CPA can help your cashflow. Alternatively, either email us or use our contact form.