27 July 2016
Find out more

UK to explore legislation to make banks refer small businesses to alternative platforms

19 March 2014  |  7079 views  |  0 london big ben

Proposals by the UK's Chancellor of the Exchequer to explore legislation that will force banks to refer small businesses that they turn down for loans to crowdfunding and P2P platforms have been cheered by the alternative lending industry.

The proposals, unveiled in today's budget statement, follow an idea first floated by coalition politician Vince Cable in a speech to the London Stock Exchange last month. At the time, he said that he was exploring an independent "referrals exchange" process so that small companies turned down for funding by a bank would be automatically referred to other providers.

He said that current process was not working: "If a bank turns down a business for a loan, in 40% of cases that business gives up."

Last week, seven of the country's major alternative funders launched a Web portal - alternativebusinessfunding.co.uk - designed to signpost SMEs to the most appropriate source of non-bank funding, providing a short-cut to alternative finance options.

Collectively, the platforms behind the initiative - CrowdCube, Funding Circle, Market Invoice, Platform Black, Seedrs, Zopa and Pensionledfunding.com - account for 85% of the alternative non-bank funding market and have provided to date more than £580m to SMEs.

Liberum, the investment bank, forecasts that alternative funding providers could originate £535bn in financing by 2024, which would represent 50% of the gross volumes in the UK and US consumer and UK SME market.

Adam Tavener, chairman of pensionledfunding.com says: "This is a real opportunity for a collaborative culture to develop between the banking and alternative sectors, not just to refer businesses but to work together on multi source deals that provide exactly the right shape of funding package for the business owner. Better signposting, would give businesses - particularly SMEs - safe access to approved lenders, while helping banks keep UK businesses growing by encouraging innovative or complimentary funding."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

WestPac fund buys stake in Oz P2P lending platform SocietyOne

WestPac fund buys stake in Oz P2P lending platform SocietyOne

11 March 2014  |  4494 views  |  0 comments | 5 tweets | 5 linkedin
FCA sets out P2P lending and crowdfunding rules

FCA sets out P2P lending and crowdfunding rules

06 March 2014  |  5515 views  |  0 comments | 5 tweets | 13 linkedin
Barclays Africa buys stake in South African P2P lender RainFin

Barclays Africa buys stake in South African P2P lender RainFin

05 March 2014  |  6268 views  |  0 comments | 4 tweets | 5 linkedin
UK crowdfunding market raises £1700 an hour

UK crowdfunding market raises £1700 an hour

05 March 2014  |  3745 views  |  0 comments | 11 tweets | 8 linkedin
New Zealand gives green light to crowdfunding

New Zealand gives green light to crowdfunding

27 February 2014  |  4380 views  |  0 comments | 5 tweets | 9 linkedin
P2P lending shows big upswing in 2013

P2P lending shows big upswing in 2013

03 February 2014  |  5668 views  |  0 comments | 12 tweets | 8 linkedin
Wells Fargo bans staff from using P2P lending platforms

Wells Fargo bans staff from using P2P lending platforms

21 January 2014  |  7073 views  |  0 comments | 14 tweets | 9 linkedin
Crowdfunding in the UK set to raise £1.6 billion in 2014

Crowdfunding in the UK set to raise £1.6 billion in 2014

13 December 2013  |  5366 views  |  0 comments | 10 tweets | 9 linkedin
UK govt to allow P2P returns within Isas - Telegraph

UK govt to allow P2P returns within Isas - Telegraph

03 December 2013  |  3403 views  |  0 comments | 6 tweets | 1 linkedin
EC explores crowdfunding action

EC explores crowdfunding action

03 October 2013  |  5876 views  |  0 comments | 5 tweets | 3 linkedin
Bank economists warn of disruptive threat from mobile and crowdfunding

Bank economists warn of disruptive threat from mobile and crowdfunding

04 July 2013  |  46625 views  |  0 comments | 70 tweets | 18 linkedin
ING Direct backs Oz crowdfunding platform for social entrepreneurs

ING Direct backs Oz crowdfunding platform for social entrepreneurs

02 May 2013  |  5894 views  |  0 comments | 4 tweets | 2 linkedin
UK govt to lend £55m through P2P sites

UK govt to lend £55m through P2P sites

12 December 2012  |  7017 views  |  1 comments | 9 tweets | 2 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit capgemini.comVisit www.abe-eba.euFind out more

Top topics

Most viewed Most shared
satelliteContactless Bitcoin startup Plutus Tap &am...
9391 views comments | 9 tweets | 4 linkedin
MasterCard agrees £700m VocaLink acquisitionMasterCard agrees £700m VocaLink acqu...
9274 views 14 comments | 32 tweets | 38 linkedin
Apps crush internet for UK banking loginsApps crush internet for UK banking logins
7887 views comments | 18 tweets | 25 linkedin
hands typing furiouslyHow machine learning can cut costs on tran...
5968 views 0 | 9 tweets | 3 linkedin
Thomson Reuters and Imperial College form fintech and regtech research partnershipThomson Reuters and Imperial College form...
5927 views comments | 29 tweets | 16 linkedin

Featured job


Brussels (Belgium) or Paris (France)

Find your next job