The chancellor said it had recently launched a consultation to explore whether lenders should be forced to release information on SMEs rejected for finance, so they can be identified and approached by alternative credit providers.
Mr Osborne said the success of SMEs was key to the UK’s economic success and the government was seeking views about an online portal that would enable lenders to find SMEs that have failed to get a loan.
He added: “We are fully focused on making sure businesses can get the finance they need to grow and create jobs. This includes actively supporting innovative new forms of business lending.
“We are setting out new proposals that will help match up other lenders with small businesses that may have been turned down for a loan by a large bank.
“A big bank saying ‘no’ should not be the end of the line for a small business. Now, with our plan, it will not be.”
According to the government, over half of SMEs seeking finance for the first time have been rejected and often do not try again.
Adviser comment: Simon Webster, managing director of Kent-based Facts & Figures, chartered financial planners, said: “It is a bit of a double-edged sword. While freeing the market to see what the banks are turning down is a good thing, as a borrower, you still have to advertise that your bank did not think you were good enough.”
