Alternative lenders get Budget lift

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Banks could be forced to direct rejected loan applicants to alternative finance providers, the government has announced in the Budget.

Under new legislation banks could be legally obliged to help match small firms that are turned down with alternative lenders.

The government will shortly launch a consultation on mandatory referrals in an effort to increase sources of finance for small businesses and spur on the alternative marketplace.

James Meekings, co-founder of Funding Circle, told our sister title...

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Alternative financing is a great solution which will bring business to a new level. Britainloan will anyway stay demanded in the nearest future but more relevant option would display it in a long-term period. This is an impetus to create new better products and to reduce price. 

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This is great and will save businesses a lot of time and stress should they be rejected by the banks. No doubt a rejection from the bank can leave SME's feeling deflated but being given an alternative means they can remain hopeful.

There are so many alternatives out there, such as cash advances from the likes of United Kapital , online lenders such as Capiota, crowdfunding, angel investors, invoice finance, etc - I do wonder what kind of alternatives the banks will be referring to.

 

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