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The UK is pushing ahead with plans to launch a platform that it hopes will match the thousands of SMEs that are rejected for bank lending with alternative financiers that are interested in doing business with them.

The Bank Referral Scheme, which was first initiated in 2014 by former chancellor George Osborne, is now open for a second round of proposals from finance platforms that want to be designated by the treasury to participate.

The treasury recently announced it had selected three platform providers from its first round of assessments: Bizfitech, Funding Options and Funding Xchange. The scheme will require banks that refuse loans to companies to make a referral to the designated finance platforms.

“Small businesses continue to face barriers when trying to gain access to finance, both from the banks – as highlighted in the recent Competition and Markets Authority (CMA) investigation into retail banking – and from a lack of awareness on SMEs’ part of new funding options available through fintech channels,” says managing director at Boost Capital, Alex Littner.

“At a time when big financial institutions like RBS and NatWest are threatening to charge business customers just to deposit money, it’s clear mainstream providers are not always working in SMEs’ best interests, or adequately serving their day-to-day needs.”

A recent survey by the British Bankers Association (BBA) shows that more than 40% of SME respondents say they will use the platform. The BBA said it welcomes the plans and that it was a great opportunity for businesses to have “multiple choice” from different providers, but the idea was not new.

“There is nothing new about this idea. Banks have always been in favour of referral – under the right circumstances. They want to help customers, even if they are not right for a bank loan, because further down the line they might be,” says executive director of business finance at BBA, Irene Graham.

At a national level, banks have established a referral system with the Community Development Finance Association as well as forging a number of strategic bilateral partnerships such as with Funding Circle, the Princes Trust, School for Startups, the Business Growth Fund and The Start-Up Loans Company, she says, adding that the key is to make sure the legislation works in the interest of the customer in terms of consent and suitable safeguards.

Industry will be working with government to bring forward legislation for the scheme, which is due to launch later this year.