Banking referral scheme – is it really new?
To the clanging of great bells and accompanied by adjectives such as “landmark”, the governments banking referral scheme has finally been launched to save our SMEs from the shame of the dreaded “DECLINED” stamp.
Well, that’s how it’s been dressed up.
This initiative has been slowly warming up on the side lines for some time now and in truth is a bit late in the game if we’re all totally honest.
When the world fell into that wide and very deep black hole known as the financial crash almost ten years ago bank bashing became our national sport. Not only were they perceived to be the cause of our misery they also seemed unwilling to help other businesses keep going in the aftermath.
Time is a luxury
Given the time it’s taken to launch the banking referral scheme, whereby banks are obliged to refer businesses they have refused credit to other possible sources, it’s not difficult to imagine how many struggling firms have fallen by the wayside. Ten days is often too long to last without sufficient cashflow so ten years will have taken some pretty serious juggling.
Luckily the UK business owners are not so green as to wait for a government promise to shake up the banking system. It may come as a surprise to some ministers but the dextrous use of a couple of index fingers on a keyboard can, and does bring up a whole host of alternative finance options for businesses seeking a whole range of products.
Before, during and well after the worst of the financial crash, finance brokers have been busy matching funding needs to finance partners in areas such as asset and receivables finance, import & export funding, payroll funding, P2P and construction finance to name but a few.
Like the prompt payment code before it, and the promise to name and shame large corporate late payers, this new government move will make headlines without having any real effect on the daily struggles facing the engine room of the UK economy.
Thankfully, that area has been and will continue to be serviced by people passionate about finding solutions to problems rather than sound bites for newspapers.
By Steve Leeves