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Alternative Finance

The Issue

The small business finance market remains too concentrated with a resulting lack of competition and choice for small firms. The growth of alternative sources of finance for small firms is therefore vital, as it provides small businesses with more options, which should increase their chances of obtaining credit. Crowd funding, peer-to-peer lending and venture capital are just some of the alternatives FSB is keen to promote.

Action FSB have taken

  • We’ve regularly engaged the Competitions and Markets Authority of the challenges small businesses face finding credit.
  • We lobbied the Government to introduce forced data disclosure by certain banks and credit reference agencies on their small and medium-sized business customers in order to boost competition.
  • We supported the Government on the design and development of the referral process for three mandated alternative finance platforms, which went live in November 2016. These will give those small firms turned down to credit the opportunity to be referred to alternative lenders.
  • In January 2018 we launched the FSB Funding Platform enabling small businesses to access a wide range of finance options.

Our Goal

The wider finance market would be more resilient if there were an increase in the number of alternative finance providers for small businesses. Removing barriers to entry in the market would ensure a diverse range of funding for small firms.

We believe diversity of finance providers, would mean greater security for small businesses in any future, economic downturn. 

“I’ve only been running my business for 18 months and have had to rely on friends and family for investment. The terms the banks are looking for before lending are ridiculous. As I don’t yet have two years worth of books, it’s a real catch-22 situation” FSB Member.

Achievements in...



  • The first Small Business Act requires designated banks lending to small businesses to disclose their data about the lending decisions they make towards small businesses. This will help alternative finance providers enter the market.
  • In November 2016 FSB produced guidance (see side bar) on how the mandated referrals platforms will work in order to encourage more small firms to consider alternative finance options.
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