SME lending continues to top the Governments’ agenda and at a conference I attended recently, George Osborne announced a series of new guidelines set to boost the fintech industry.
A couple of the new measures really stood out. First, the recently created British Business Bank (BBB) is set to receive an additional £100m for its investment programme. This is fantastic news as it aims to help address the long-standing gaps in the finance
market for smaller businesses and promote greater choice.
The Chancellor also revealed that the Government is set to introduce legislation making it easier for SMEs to gain access to alternative finance lenders if they are turned down for growth capital by their bank.
Banks have long been the sticking point for most SMEs. Previously, if a firm is rejected for finance, they’ve been left in the cold to look for alternatives on their own. Now, banks will be required to ask these firms whether they want their information
to be shared with alternative finance lenders, providing businesses with additional options for securing capital.
I was particularly pleased to see that this process is under review as it delivers a ringing endorsement of alternative finance providers. Not only does this offer firms a variety of options they previously might not have known about, lenders also stand
to benefit from a huge increase in traffic from referrals.
The Government is taking the initiative in tackling the major banks’ dominance of the SME lending market and enabling new conversations on alternative finance. Better still, Osborne has also pledged to consider the possibilities for further regulation of
digital currencies, which look likely to present a range of opportunities for financiers in the future.
All the measures outlined at the conference add a greater legitimacy to an industry rapidly increasing in both recognition and reputation. The Government have identified the need to encourage finance alternatives in order to kick-start the economy and keep
creativity and innovation alive in the UK through the support of SMEs.