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In essence the (prosaically named) “UK SME Finance Referral Scheme” basically means that soon banks wont be able to tell SMEs to bugger-off any more (which was the reality behind the prosaic (and often very slow) “loan application declined” formula). Rather banks that turn down loan requests will need to direct SMEs to a portal(s)/alternative finance providers.
This market is far more diversified than fintech folks might imagine – for example the challenger banks Aldemore and Shawbrook have each individually lent more than the entire P2P industry. Last year Funding Options referred SME borrowers to 50 different providers of finance (in one case saving 100 jobs). They believe that this number is well in excess of any other players, but even then estimate that they have only addressed about 20% of the possibilities.
As you might imagine whilst the concept is simple the implementation of the scheme is tricky and complex. Conrad has been one of the key players advising the government in this context and Funding Options are one of the possible portals.
Conrad discusses the scheme and in the process covers the SME funding market – there are possibly more providers in the UK than in any comparable market in the world.
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