UK banks will be required to help SMEs find funding elsewhere if they are unable to provide financial support themselves following a new legislation included in the Small Business, Enterprise and Employment Bill. Alternative funding could be found in smaller banks, crowd-funders and fintech investors, peer-to-peer lenders and invoice finance providers.
Business Secretary Vince Cable said this about the new legislation - “Forcing banks to refer businesses to alternative lenders is something I’ve been determined to make happen. It’s good that more SMEs are making use of alternative finance but the big banks still dominate and small businesses often give up if they’re turned down for finance by their bank.”
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