Advertisement
UK markets close in 2 hours 42 minutes
  • FTSE 100

    8,219.23
    -28.56 (-0.35%)
     
  • FTSE 250

    20,305.62
    -57.81 (-0.28%)
     
  • AIM

    765.94
    -2.09 (-0.27%)
     
  • GBP/EUR

    1.1839
    +0.0002 (+0.01%)
     
  • GBP/USD

    1.2652
    -0.0034 (-0.27%)
     
  • Bitcoin GBP

    48,493.19
    +196.34 (+0.41%)
     
  • CMC Crypto 200

    1,275.13
    -8.66 (-0.67%)
     
  • S&P 500

    5,469.30
    +21.43 (+0.39%)
     
  • DOW

    39,112.16
    -299.05 (-0.76%)
     
  • CRUDE OIL

    81.37
    +0.54 (+0.67%)
     
  • GOLD FUTURES

    2,329.30
    -1.50 (-0.06%)
     
  • NIKKEI 225

    39,667.07
    +493.92 (+1.26%)
     
  • HANG SENG

    18,089.93
    +17.03 (+0.09%)
     
  • DAX

    18,109.37
    -68.25 (-0.38%)
     
  • CAC 40

    7,586.83
    -75.47 (-0.99%)
     

Santander UK to refer small businesses to peer-to-peer lender

Customers use ATM machines at the Surrey Quays branch of Santander Bank, whilst the premises remain closed , in Surrey Quays, south London, September 13, 2013. REUTERS/Toby Melville (Reuters)

By Matt Scuffham LONDON (Reuters) - Santander UK will become the first British bank to refer rejected applicants for loans to an alternative finance provider, a move its rivals could be forced to follow as Britain looks to boost lending to small businesses. Britain's biggest banks have been accused of failing to provide sufficient credit to small and medium-sized enterprises (SMEs) and the government is considering making it compulsory for them to direct failed loan applicants to alternative institutions, such as peer-to-peer lenders. Santander said on Wednesday it would refer some of its SME customers to Funding Circle, one of Britain's biggest online lending platforms, in cases where it believed the peer-to-peer lender was "better placed to help". "Santander's partnership with Funding Circle is a good example of how traditional, and alternative finance can work together to help the nation’s SMEs prosper," said Santander UK's Chief Executive Ana Botin. Peer-to-peer loans allow investors to lend directly to individuals and businesses via low-cost online platforms. Funding Circle's founder Samir Desai said Santander had "created a blueprint for other banks to follow". As part of the agreement, Funding Circle said it would direct SMEs to Santander when they required day-to-day relationship banking or other services such as international banking and cash management. Funding Circle has helped over 5,000 firms borrow more than 290 million pounds since its launch in 2010. Its investors include thousands of private individuals, the government-backed British Business Bank, and local councils. It lends businesses between 5,000 pounds and 1 million pounds and offers investors an average net return of 6.1 percent. (Reporting by Matt Scuffham; Editing by Mark Potter)