Legislation to help SMEs access alternative sources of funding
16 October 2014
The government has published draft legislation that includes help for smaller businesses to seek out alternative lenders if the big banks turn them down for loans.
Thu, 16 Oct 2014 | By Nicola SullivanThe government has published draft legislation that includes help for smaller businesses to seek out alternative lenders if the big banks turn them down for loans.
The legislation, brought in by the Small Business Enterprise and Employment (SBEE) Bill, seeks to introduce measures requiring banks that refuse to offer businesses funding to help them find another option.
This means businesses can choose to have their key information passed on to government designated platforms that will help match them with alternative lenders.
The government consulted on these proposals in March 2014. A summary of responses was published in August, which confirmed widespread support for the proposals. The SBEE Bill is expected to come into force early next year.
A statement from the government said over half of SMEs seeking finance for the first time get rejected and that research showed most of them do not try again.
Samantha Hurley, head of external relations at APSCo, told Recruiter: “We have to welcome this. It is only going to be good news for SMEs and I think anything that gives them more understanding and more access to alternative finance options has got to be a good thing.”
Hurley said she was still “struck” by the short amount of time spent by SMEs on looking for funding. “SMEs don’t necessarily think beyond their bank and they don’t necessarily have the time,” she said.
However, this legislation does not help recruiters when it comes to invoice financing, which creates challenges for many SME recruitment firms.
The legislation, brought in by the Small Business Enterprise and Employment (SBEE) Bill, seeks to introduce measures requiring banks that refuse to offer businesses funding to help them find another option.
This means businesses can choose to have their key information passed on to government designated platforms that will help match them with alternative lenders.
The government consulted on these proposals in March 2014. A summary of responses was published in August, which confirmed widespread support for the proposals. The SBEE Bill is expected to come into force early next year.
A statement from the government said over half of SMEs seeking finance for the first time get rejected and that research showed most of them do not try again.
Samantha Hurley, head of external relations at APSCo, told Recruiter: “We have to welcome this. It is only going to be good news for SMEs and I think anything that gives them more understanding and more access to alternative finance options has got to be a good thing.”
Hurley said she was still “struck” by the short amount of time spent by SMEs on looking for funding. “SMEs don’t necessarily think beyond their bank and they don’t necessarily have the time,” she said.
However, this legislation does not help recruiters when it comes to invoice financing, which creates challenges for many SME recruitment firms.
