TSB, the U.K.'s challenger bank, is gearing up to create Business Marketplace, an internet site that will enable small businesses to compare financing options from several lenders all in one place.
In a press release, TSB said small business banking is controlled by the big banks, which dominate more than 90 percent of the market. Small businesses, as a result, only seek financing from the big banks, and often face complex and time-consuming application processes. The problem is also worsened because many small business loan applications are turned down. For first-time startup borrowers in the U.K., TSB said the rejection rate is roughly 50 percent.
TSB said it is entering the market to create more competition for the big banks that have been dominating small business lending for “far too long.” The bank is partnering with Funding Option to provide Business Marketplace, which will go live in May. According to TSB, small business owners will be able to look at rates within minutes and open up a range of loans and financing vehicles. They can shop around for loans or apply for one with TSB on the site.
“When I speak to small business owners across the U.K., I am acutely aware that running a small business leaves little time and energy to find the right business lender and navigate complex business lending procedures,” said TSB’s new commercial banking director, Richard Davies. “We want to help small businesses to focus on what they love doing the most, which is running their business. That’s why we’re partnering with Funding Options to launch a straightforward and competitive lending marketplace that helps small businesses to borrow well – with access to a host of lending options that they can compare side-by-side to find the loan that best suits them.”
According to TSB, the Business Marketplace announcement is just the latest example of how the bank is trying to bring more competition to the small business banking market this year. It has already partnered with Enterprise Nation to enhance the digital capability of small businesses across the U.K., and has announced that parent Sabadell has committed up to £100 million pounds of funding to invest in small businesses and start-ups based in U.K. regions.