THE THREE aggregator platforms chosen for the government’s bank referral scheme will have competition in sourcing alternative finance for small businesses, as NatWest’s own referral initiative enters its full launch phase.
The high street lender, which is owned by RBS, has expanded the panel of alternative lenders that it refers its business and commercial customers to if it rejects their loan applications.
The panel, called Capital Connections, was introduced as a pilot scheme earlier this year when the banking group referred unwanted business to two peer-to-peer platforms, Assetz Capital and Funding Circle. It has now extended the referral panel to include iwoca, which provides working capital for small businesses, Together, a property-secured lender and RBS Social and Community Capital, for social enterprise and charity lending.
More partners will join Capital Connections in the coming months, RBS Group said.
The announcement coincides with the launch of the long-awaited government referral scheme, which is entirely separate.
“It effectively gives our business and commercial customers a choice of eight alternative finance avenues,” a spokesperson for the banking group told Peer-to-Peer Finance News.
“It’s just about offering more choice, which has got to be a good thing.”
Under the Treasury’s initiative, RBS, along with Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust Bank will refer small businesses rejected for finance to three platforms – Funding Xchange, Business Finance Compared and Funding Options.
These platforms will then share the details of the businesses seeking loans with alternative finance providers.
“This scheme gives businesses the confidence to move forward and not let rejection from a high street bank hamper their plans for growth,” said Katrin Herrling, co-founder and chief executive of Funding Xchange about the government scheme.