More than £15 million in funding has been secured for businesses after they were rejected by their banks, new figures reveal.
The research, published by HM Treasury, shows that there is hope yet for small and medium-sized enterprises (SMEs) who fail to secure finance through traditional methods.
Under the Bank Referral Scheme, businesses are matched up with alternative lenders if they fail to meet the lending criteria of their high street bank.
The figures show that in the 12 months to August 2018, some 670 small businesses have raised more than £12 million through the scheme. This means, since the launch of the referral programme in November 2016, over £15 million has been raised.
The Treasury says the amount raised this year has quadrupled when compared to the same period a year before.
The scheme was launched in response to a study which found that a huge number of small businesses simply gave up trying to raise finance after initially being rejected by their bank.
The loans, offered by three online credit brokers including Alternative Business Funding, Funding Options and Funding Xchange, ranged from as little as £100 to a massive £1.3 million.
John Glen, Economic Secretary to the Treasury said: “From breweries to beauticians, more than 900 British businesses have been matched with the funding they need to grow since we introduced our scheme.
“Small businesses are the backbone of Britain, yet many give up on their plans to expand if they can’t get a loan from their bank. Now, however, thanks to our match-making scheme, they have another shot.”
Alice Hu-Wagner, Managing Director for Strategy, Economics and Business Development at the British Business Bank, added: “One of our key objectives at the British Business Bank is to encourage and enable smaller UK businesses to seek the finance best suited to their needs. Just over half of smaller businesses consider only one provider when they need funding, however, with over a quarter putting their plans on hold or giving up altogether if they aren’t offered the full amount they were seeking.”