While it may have stopped short of announcing the necessary legislation, the Queen’s Speech today suggested that a bank referral system might not be too far away.
It was believed by some, most notably Louise Armistead of The Telegraph, that mandatory SME referral for the banks would be confirmed by today’s speech. The legislation – that George Osborne recently launched a government consultation into – would force high street banks to direct businesses that they have rejected for funding onto alternative finance providers. There was no explicit confirmation today, but the following quotes from within the speech itself are a bright sign of things to come:
“The Bill will support small businesses by cutting bureaucracy and giving them access to finance.”
“Government will deliver a stronger and fairer economy.”
“This Bill will make Britain the best place to start, finance and grow a business.”
You can view a full summary of what the SME focused Bill entails here. For now it seems, as with the ISA frenzy at the start of the year, the alternative finance sector will be forced to hold its breath a little longer for categorical confirmation of a referral scheme.
Giles Andrews, Founder and CEO of Zopa, commented:
"From legislation outlined in today's Queen's Speech, let's hope that the increase in availability and sources of finance for businesses will lead to the banks collaborating with the alternative finance industry. This will help refer thousands of businesses to the likes of Zopa and the partners in the Alternative Business Funding portal to help get them the finance options they require to grow.”