Business funding review

Are you in?

On 28th of March the Chancellor announced to the Federation of Small Business potential plans to force banks to release details of declined proposals to a platform of alternative lenders featured in this article.

The idea that banks or other lender can benefit from working with third parties to assist with declined proposals is hardly a new one - in fact it is an extremely good idea - which is why we have been doing precisely that for the last 10 years.

Perhaps we are biased, but any message that drives home the fact that there are secondary alternatives must be a positive move.

However - the things to make your spine shudder (not in a good way!) are:

·  Force lenders to release details. How about educating them and enabling them to make professional judgement?

·  So that they can be identified & approached by alternative lenders: How many lenders and how will they narrow down criteria to ensure they aren't wasting each other's time ? Having spent between us about 90 years learning the broking trade it is hard to see it being boiled down to a few bullets.

·  Creating a new online platform: Sorry, but these words coming from any Government department can only invoke images of vast budgets, infinite committees and ultimate disaster.

Couple the above with the fact that Government as a whole have a near perfect record of choosing the wrong partners - far more impressive than the average stroppy teenager intent on upsetting their parents.

In a nutshell - there are a lot of good secondary lenders out there - early indications are that this project will focus entirely on crowd-funders. Crowd funding (or peer-to-peer lending) is a great niche - but it is a niche and isn't representative of the whole of the market.

Being told 'no' by a bank should be the start of a journey, not the end. In order to get professional guidance, chose an established and local FCA - licensed broker - not a platform that is fed your details in order to cold call you!