From today, the UK’s nine largest banks will be legally required to help entrepreneurs find funding elsewhere, thanks to the bank referral scheme
Katrin Herrling felt she had nowhere to go when, in the midst of the financial crisis, her bank suddenly changed its lending terms. She had inherited a dairy farm and needed support with her cash flow during the four months of the year the cows weren’t producing milk. “Nothing in our position had changed but the banks felt they had to rebuild their balance sheet,” she says. “I didn’t know where to turn … I [knew] that just going to another bank where I didn’t have an established relationship wasn’t going to solve the issue. Outside of banks, I had no idea.”
From today, entrepreneurs should not find themselves in Herrling’s position. As part of the Small Business Enterprise and Employment Act 2015, the UK’s nine major banks will be legally required to refer those SMEs they refuse to finance to an alternative provider, under the bank referral scheme.
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Source: Guardian