FINANCE aggregator Alternative Business Funding (ABF) has hailed the success of the government’s Bank Referral Scheme after helping three firms secure funding within hours of being rejected by their mainstream financial institution.
The Bank Referral Scheme was launched in November 2016, mandating nine of the UK’s high-street banks to pass on the details of rejected business borrowers to designated finance aggregator platforms, who can then make referrals to alternative finance firms such as peer-to-peer lenders.
One small business referred to the ABF platform received funding through alternative finance provider Iwoca within two hours, another within three hours, and the third customer received funding just 24 hours after registering.
All three businesses had initially been turned down for funding by Barclays, RBS and HSBC respectively before being referred to ABF through the Bank Referral Scheme.
“This graphically illustrates the success of the government’s Bank Referral Scheme as all three businesses had been turned down by their banks before being referred to ABF,” John Evans, business development manager at ABF, said.
“The rapid turnaround of these successful applications also highlights the ABF’s ability to identify a suitable finance provider for the client and the platform’s capability to automatically connect with a funder to speed up the process.”
The Treasury reported in August 2018 that more than 900 small businesses turned down for loans from the UK’s high-street banks had received over £15m of funding through the Bank Referral Scheme.
Sharif Mohamed, head of affiliates at iwoca said UK small businesses have accessed more than £3.5m from the lender via the Scheme so far.