The days of a smug, ill-suited power-hungry bank clerk coughing the line “the computer says no” could be numbered. Or, at the very least, budding entrepreneurs won’t be feeling totally lost at sea following another fruitless bank meeting.
For, following a budget that was welcomed by many in the business community, George Osborne has now announced new proposals to enable SMEs to be able to find alternative loan providers with more ease.
Whilst these plans were hidden away in the extensive budget document, the chancellor has now revealed a consultation on the new measures, asking whether the government should legislate to require lenders to release information on SMEs they reject for finance.
It was rather fitting that Gorgeous George should choose to make this announcement at the Federation of Small Businesses’ (FSB) annual conference, an event that marked the body’s 40th anniversary.
It all comes off the back of figures indicating that over 50% of SMEs seeking finance for the first time are rejected – often causing those turned down not to try again. It is hoped that the proposals made will provide SMEs with a greater understanding of other lending options as well as for an online platform to be created so that lenders can identify SMEs that have been rejected.
“The success of small and medium sized business is key to the government’s long-term economic plan,” proclaimed Osborne. “That’s why we are fully focused on making sure businesses can get the finance they need to grow and create jobs. This includes actively supporting innovative new forms of business lending. “A big bank saying ‘no’ should not be the end of the line for a small business. Now, with our plan, it won’t be.”
Vince Cable, business secretary, backed his new chum Osborne. “Too many businesses are put off looking for finance if they are turned down by their bank,” he said “By putting the onus on banks to refer these businesses to other sources of finance, we can help make sure the potential of the country’s small businesses isn’t lost.”
Of all the announcements made in recent weeks, this one has certainly got us the most excited. Sad but true.
To find out more about the consultation and to have your say, click here.