AltFi.com uses cookies on this website. They help us to know a little bit about how you use our website, which improves the browsing experience and marketing - both for you and for others. They are stored locally on your device. By continuing to use this site you accept this use of cookies. Go to the Privacy and Cookies page for more information. You'll see this message only once.
Not signed in. Log in here.

Your daily download of all things alternative finance and fintech, from us at AltFi


 

Next Step in Referrals Process




By Ryan Weeks on 29th July 2015

Dean Hochman, https://goo.gl/OqXDV1

The mandatory bank referral process is inching towards its conclusion.

 

Today we learn that a number of prospective referrals platforms have been shortlisted for consideration. These companies were required to submit an expression of interest to the British Business Bank (BBB), as announced in the Chancellor’s Budget in March. While the power to designate rests firmly with the Treasury, they will designate based upon the advice of the BBB – making the latter a key player in the referrals process.

 

As a reminder, the government confirmed in August 2014 that a system of SME referrals was to be imposed upon the high street banks. At some point in the not too distant future, high street banks will be required to direct the small businesses that they reject for funding towards the alternative finance sector. The medium for this process of referral will be the “neutral finance platform” – which will effectively play middleman between bank and alternative finance provider. It is the job of the finance platform to innovatively and effectively match SMEs to the funding source that is best suited to their requirements.

 

The British Business Bank has, over the past several months, accepted expressions of interest from a wide range of “finance platforms” and Credit Reference Agencies. Of the companies that have held up their hands for consideration, the BBB has now determined which will be more thoroughly considered.

 

This process of “shortlisting” is just the first step in the designation journey. We now move into "Request for Proposal" territory – which is likely to entail a much more rigorous level of scrutiny.

 

Despite much probing, we simply haven’t been able to ascertain how many platforms have been shortlisted. We can confirm that Funding Options, FINPOINT, AlternativeBusinessFunding, Funding Xchange and the NACFB are among those in the running. We suspect the final number sits somewhere between 10 and 20.

 

We’ll keep you updated on the designation process. In the mean time, reaction from the combatants…

 

Conrad Ford, CEO of Funding Options, said:

 

“Today’s announcement cements Funding Options position as one of the leading online marketplaces for SMEs and lenders. We’re delighted that our dedication to developing a proposition that addresses the key challenge of SMEs locating and accessing a range of alternative finance providers capable of meeting their funding needs has been recognised. Our only ask now is that the British Business Bank moves quickly to get the scheme off the ground in order to harness the power of SMEs in further driving the UK’s economic recovery.”

 

From Adam Tavener, catalyst of the ABF collaboration:

 

Receiving confirmation from the British Business Bank that our Expression of Interest (EOI) to become a designated portal was successful, was met with a mix of excitement and relief. Although we thought our EOI was strong, and we believe passionately in the innovative and collaborative ABF model, you are never quite sure that what you submit is what they want to see.

 

It’s fair to say that this is among the genuine milestones passed on this journey, and it comes the same week that the ABF portal passed the 30,000 visits mark.  Thirty thousand site visits in just over a year with a zero marketing budget, tells me that there might actually be something to this collaborative model.”

 

Rainer Plentl, CEO of FINPOINT, commented:

 

“Alternative finance continues to develop rapidly and is of great help for businesses of any size but particularly SMEs looking to access finance. We’re delighted to operate a technology platform that has been developed over the past five years and acts as a 'one stop shop' - providing SMEs and their accountants or advisors with numerous lenders. Our panel includes new FinTech lending platforms but also traditional SME funding sources, such as banks, institutional lenders, leasing, invoice and trade finance providers. We welcome the validation of our pan-European web platform by the British Business Bank at this stage in the process and look forward to continue to play a key role in raising awareness of the sector and in opening up financial choice for the diverse SME community in all corners of the UK.”

 

Comments


Enter your name:

Enter a comment in the box below: