British Business Bank calls for referrals partners to help transform smaller business finance markets

Press release 24 March 2015

Innovative referrals initiative will improve finance options for smaller businesses.

Today the British Business Bank is inviting potential delivery partners to apply to be part of an innovative referrals programme to help small businesses.

These online platforms will put referred businesses’ requirements in front of a range of alternative finance providers, who will have the opportunity to offer them the finance they need. Applications are now open for those interested in providing the online platforms.

Smaller businesses will have a greater choice of provider and chance of securing finance, alternative providers will have access to a bigger market of potential clients, and the major banks will be able to offer an additional service to those they initially turn down. Keith Morgan CEO of the British Business Bank

British Business Bank’s Small Business Finance Markets 2014 report, published last December, found that despite some new entrants – including challenger banks and peer-to-peer lenders – the UK banking sector for smaller businesses remains a concentrated market.

Two thirds of SMEs only go to one provider when seeking finance and 38% of businesses appear to give up their search for finance and cancel their spending plans after their first rejection (BMG SME Journey Survey 2014).

New sources of finance which serve to improve diversity of supply exist and are growing, but from a low base, and most small businesses are not aware of the full range of external finance options.

This varies significantly across different types of finance. 85% are aware of leasing or hire purchase, but the figures are much lower, although rising, for alternative funding sources, with 32% aware of crowdfunding and 35% aware of peer-to-peer lending.

Further Information

Notes to editors

The Government announced in Budget 2014 that it would consult on whether, and if so how, to take legislative action to help match SMEs that have been rejected for finance with challenger banks and alternative finance providers that are looking to offer finance.

HM Treasury announced in 2014 Autumn Statement which banks it intends to designate: Royal Bank of Scotland, Barclays, Lloyds Banking Group, HSBC, Santander, Clydesdale and Yorkshire Banks, Bank of Ireland, Allied Irish Bank and Danske Bank.

HM Treasury tabled an amendment to the Small Business Enterprise and Employment Bill on 14 October 2014 containing provisions giving the Treasury power to make regulations, including:

  1. requiring designated banks to share information on businesses that they reject for finance (where those businesses have agreed) with online platforms that will help them to make contact with alternative lenders.
  2. enabling the Treasury to designate private sector platforms to receive and share data provided by mandated banks
    enabling the Treasury to de-designate platforms that fail to meet minimum standards.
  3. The British Business Bank role will be to apply a rigorous assessment process to applications, gather information and so inform HM Treasury decisions on Finance Platforms suitable for designation.

About the British Business Bank

The British Business Bank makes finance markets for smaller businesses work better, enabling the sector to prosper, grow and build economic activity.

Its objectives are to:

  • increase the supply of finance available to smaller businesses where markets don’t work well
  • create a more diverse and vibrant finance market for smaller businesses, with a greater choice of options and providers
  • build confidence in the market by increasing smaller businesses’ understanding of the options available to them
  • achieve this whilst managing taxpayer resources efficiently and within a robust risk management framework.

British Business Bank plc is a public limited company registered in England and Wales registration number 08616013, registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH.

As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA).

British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA. British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found at