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More British businesses up and down the country are getting the financing they need to grow and expand, new figures show today.
Over the past 12 months, 796 businesses have raised nearly £17 million of funding through the Bank Referral Scheme (BRS), a significant increase on the previous year, the government has said.
Since it was introduced, £32 million has been sourced for businesses all over the UK.
"It’s great to see this scheme go from strength to strength, with nearly 1,700 British businesses up and down the country accessing the funding they need," said the Economic Secretary to the Treasury, John Glen.
Mr Glen judged that it’s not right that so many small and medium-sized businesses simply had to give up when they were turned down by their bank for a loan.
"I now want to see more of our trailblazers and entrepreneurs use this scheme to get the backing they need to grow and help boost our economy," he added.
The BRS was launched in November 2016 in response to evidence that suggested that after being turned down for a loan by their bank, small and medium-sized businesses rarely sought other options for financing.
It requires nine of Britain’s biggest banks to pass on the details of businesses they have turned down for loans to online credit brokers. These platforms are, in turn, required to share their details, in anonymous form, with alternative finance providers, helping to facilitate a conversation between the business and any provider who expresses an interest in supplying finance to them.
"One of the British Business Bank’s key objectives is to encourage and enable smaller UK businesses to seek the finance best suited to their needs. We’ve seen the value of lending through the government’s Bank Referral Scheme increase by a third over the last year, which points to its growing use amongst smaller businesses," said managing director for strategy, economics and business development at the British Business Bank, Alice Hu Wagner.
Research shows that if businesses don’t receive the full amount of financing they’re seeking, 49 per cent either cancel or put their plans on hold, or give up altogether, Ms Hu Wagner revealed.
"This makes the scheme particularly important in the small business finance ecosystem, and the bank is pleased to continue to support it, as it offers an additional option for businesses if they are unsuccessful in their original finance application," she said.
The British Business Bank administers the scheme on behalf of HM Treasury. This involves collating the data from platforms, as well as carrying out due diligence for platforms that apply to be designated.