Platform launched to address “chronic” lack of small business overdrafts
Launch follows news that banks are more reluctant to lend to small firms, with businesses in the North hit hardest by overdraft cuts
A business overdraft platform for small and medium-sized businesses has launched today to address the “chronic” lack of bank overdrafts for small firms in the UK.
Offering flexible business overdrafts of up to £150,000, Growth Street will review the financial health of a firm using cloud-based software to help customers access “fairly-priced finance”.
The start-up claims that “compared to high street banks’ typically low level of acceptance and slow turnaround time” it will target to accept 84% of applications within three days of submission.
The launch comes on the back of recent statistics which show that small businesses across the country are facing overdraft reductions. Companies in the North have been hit hardest by overdraft cuts; 55% of Northern businesses have had their overdrafts reduced or withdrawn entirely in the last two years, and 25% of London businesses have faced the same issue.
James Sherwin-Smith, Growth Street’s CEO, commented: “Small business finance in the UK is fundamentally broken. Over the last three years there has been an almost 50% fall in bank overdraft facilities for smaller businesses and the amount borrowed has tumbled dramatically.
“The huge reductions in business overdrafts are restricting Britain’s fast-growing and profitable small businesses from managing their cash flows effectively. By limiting access to this form of finance, banks are stunting small business growth. This is a situation we are aiming to rectify with the launch of Growth Street.”