Few can doubt the goodwill of the government towards small business funding. We are doing our own modest best by trying to bring individual lenders together with small companies seeking funds to grow. So we welcome the latest initiative, as reported by CRN.
"The government is aiming to give growth-hungry SMEs a potential funding boost with a new credit-data sharing scheme.
"The programme is designed to make it easier for new challenger banks and alternative finance providers to check the creditworthiness of potential business customers, thereby increasing the flow of credit to SMEs.
"The government now requires nine banks and three credit reference agencies to share the credit information they hold on SMEs equally with all finance providers, with the SME's permission.
"According to the government, a lack of information about the creditworthiness of SMEs has been a barrier to competition in the SME lending market.
"The nine banks in the regulations are RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Banks, Bank of Ireland, Danske Bank and First Trust Bank.
"These banks will be required to share credit information on their SME clients with Experian, Equifax and Creditsafe, which must then share the information with all financial providers equally.
"Harriett Baldwin, economic secretary to the Treasury, said: 'Small businesses are the backbone of Britain's economy and it is right we make every possible source of finance available to them.'
"Data sharing is expected to begin later this year when tests between banks and credit reference agencies confirm that data can be shared accurately and securely."
Loans at Money&Co.
We pride ourselves on the scrupulousness and rigour of our credit-analysis process. The careful examination of borrowers has been a major factor in the slowing down of deal flow this year - with activity largely confined to the after-launch market, where registered users buy and sell loans amongst themselves. We expect to announce a new loan this week.
Risk Analysis at Money&Co.
See a basic explanation of the risks of being a lender here, from our Frequently Asked Questions page. See also our Knowledge Hub for facts and tips on crowdfunding in general and P2P lending in particular.