The consultation asks whether the government should legislate to require lenders to release information on SMEs they reject so that alternate credit providers could approach them.
Speaking at the Federation of Small Businesses (FSB) 40th anniversary conference, the chancellor announced how proposals aim to make it less difficult for SMEs to find alternative finance.
Osborne said: “We’re setting out new proposals that will help match up other lenders with small businesses that may have been turned down for a loan by a large bank. A big bank saying ‘no’ should not be the end of the line for a small business. Now, with our plan, it won’t be.”
The FSB welcomed the chancellor’s new consultation. John Allan, National Chairman, FSB, added: “Accessing finance is essential for small firms to invest and grow. Recent years have seen those firms struggle to get hold of the finance they need.
“While lending to small businesses is dominated by the big five high street banks, today’s announcement could help businesses find alternative lenders and introduce more competition into the market.”
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