Limited company contractors will be interested to learn that the government has announced proposals to make it easier to find alternative loan providers.
The Chancellor made his announcement at the Federation of Small Businesses’ (FSB) 40th anniversary conference, where the consultation asked whether the government should legislate to require lenders to release information on small businesses they reject for finance, so that they can be identified and approached by alternate credit providers.
The government is ultimately aiming for new online platforms to be created so that lenders can find small businesses that are looking for a loan, but have been rejected first time around. According to research, over half of smaller firms seeking finance for the first time get rejected.
The Chancellor has said that the proposals will bridge the gap between small companies who don’t know that other lending options could meet their needs, and alternative lenders not knowing these businesses need a loan.
Chancellor of the Exchequer, George Osborne said, “The success of small and medium sized business is key to the government’s long term economic plan. That’s why we are fully focused on making sure businesses can get the finance they need to grow and create jobs. This includes actively supporting innovative new forms of business lending.
“We’re setting out new proposals that will help match up other lenders with small businesses that may have been turned down for a loan by a large bank. A big bank saying ‘no’ should not be the end of the line for a small business. Now, with our plan, it won’t be.
Business Secretary Vince Cable added, “Too many businesses are put off looking for finance if they are turned down by their bank. By putting the onus on banks to refer these businesses to other sources of finance, we can help make sure the potential of the country’s small businesses isn’t lost. A better referrals system will be good for competition, and good for the economy.”
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