Many SMEs give up on funding after just one rejection from big banks, without realising they may be legally entitled to a second chance. Under the UK’s Bank Referral Scheme (BRS), traditional lenders are obligated to refer declined applicants to government-approved alternative finance platforms. 

This financing gap represents a significant barrier to business growth and economic development. However, the UK government has implemented comprehensive initiatives to address this issue. Under the Bank Referral Scheme (BRS), established with advice from the British Business Bank, HM Treasury has designated three specialised platforms that participate in this scheme: Alternative Business Funding, Funding Options, and Funding Xchange. Yet despite this legal requirement, many SMEs remain unaware of this automatic gateway to alternative funding. 

The Extent of the SME Finance Challenge

The problem is compounded by information asymmetries between SMEs and lenders. Many business owners lack awareness of government-backed schemes and digital lending marketplaces while simultaneously harbouring concerns about data sharing with unfamiliar lenders, fearing exposure of business weaknesses or an increased likelihood of rejection. 

Recognising this broader challenge, the UK government has implemented comprehensive initiatives to bridge the finance gap: 

• The Smart Data Bill facilitating improved data sharing between businesses and lenders 

• Enhanced data governance frameworks providing clearer guidelines for secure data sharing 

• Support for digital lending marketplaces that offer SMEs access to diverse funding options through single applications 

The Evolving Role of Accountants in SME Lending Strategy

Despite these government initiatives, a critical funding gap of £22 billion still exists between available funding solutions and SME uptake. This is where the accounting profession’s evolution becomes pivotal. Accounting professionals can uniquely position themselves to bridge this divide due to their established client relationships and technical expertise. 

The accounting profession is undergoing a clear transformation. They are no longer confined to just compliance and bookkeeping. They are becoming central to business strategy. According to a study by PracticeWeb, 61% of clients now turn to their accountant as their main source of business advice, leaving nearly 40% potentially relying on less informed sources. 

This evolution reflects the growing trust placed in accountants as strategic advisors, not just service providers. By leveraging their access to real-time financial data, understanding of digital lending platforms, and knowledge of government-backed schemes, accountants can help SMEs overcome information gaps, navigate funding options with confidence, and ultimately unlock the finance they need to grow. 

Overcoming Data Sharing Barriers: Accountants as Trusted Financial Stewards

One of the biggest reasons SMEs hesitate to explore funding is concern around sharing financial data. Research indicates that SMEs are more likely to trust business service providers they already work with rather than unfamiliar lenders. This makes accountants ideal intermediaries for facilitating data consent processes. 

Many business owners don’t realise that data sharing is consent-based. Hence, most loan applications are still manually processed. And when the process feels unclear, SMEs may hold back on sharing information often to their own disadvantage. 

In reality, lenders already have access to data to assess SME risk. When that data is missing, they may assume higher risk levels. Accountants can step in here and educate SMEs about how the process works and why sharing accurate data matters. 

As trusted data stewards, accountants can establish consent-based sharing arrangements that comply with new data governance frameworks while helping SMEs understand their financial health better. This educational role is crucial, as customer education appears essential for making referral schemes and marketplace business models successful. 

How Accountants Can Help Maximise Marketplace Effectiveness

This educational role naturally extends into digital finance platforms. Despite government support, many SMEs still see marketplaces as a last resort, often only turning to them after rejection from traditional banks. The CFIT report highlights this gap, noting that digital marketplaces haven’t yet solved SME funding challenges at scale. 

By educating SMEs about the benefits of marketplaces, accountants can change how these platforms are perceived. They demonstrate how marketplace models bring competitive finance options into a clearer view. This helps viable businesses explore multiple funding routes for their future plans. 

The combination of established trust relationships, technical integration capabilities, and comprehensive financial stewardship position accountants to transform how business’ view alternative finance. Rather than unknown and potentially risky options, marketplace lending becomes part of a strategic financial framework managed by trusted strategic advisors. 

Accountants Navigating Digital Lending Platforms for SME Success

As accountants continue to evolve into strategic advisors, their access to digital lending infrastructure becomes a powerful advantage in supporting SME clients. With growing familiarity and authority in this space, accountants can confidently navigate both government-backed and private finance platforms to find tailored funding solutions. 

Beyond BRS platforms, with clients’ consent, accountants can tap into integrated marketplaces. These platforms help compare a wide range of funding options in one place. Accountants can then assist businesses in preparing structured, lender-ready documentation, enhancing the quality of submissions and the likelihood of approval. 

By combining these marketplaces with powerful financial analysis solutions like Pulse, accountants can offer even more comprehensive support. Following the UK Government-backed Smart Data standards, Pulse provides more standardised and structured financial insights drawn from Open Accounting and Open Banking sources. This makes it easier to present consistent, lender-friendly data while reducing manual errors. 

With this structured data and real-time insights in hand, SMEs can confidently explore a wider range of tailored funding options. Marketplaces, in turn, become more effective by surfacing viable choices based on real financial health and not just credit scores. This gives SMEs a clearer edge when applying for finance, and accountants play a crucial role in making that happen. Equip your advisory services with powerful analytics. Contact Pulse today. 

The Strategic Imperative for Accountants in Closing the SME Finance Gap

The combination of government initiatives, technological capabilities, and professional evolution creates an unprecedented opportunity for accountants to bridge the SME finance gap effectively. Government schemes have laid the groundwork, demand for strategic advice is clearly growing, and the right digital tools are now in place to deliver support efficiently. 

The UK’s SME finance gap represents both a challenge and an opportunity positioned between policy and practice, accountants can serve as strategic enablers. They can connect government efforts with the real needs of small businesses and help unlock the capital required for growth. 

Seizing this opportunity will depend on more than tools alone. It demands trust-based client relationships, technical know-how, and a service approach that turns alternative finance from a last resort into a smart, strategic option. 

The real question is no longer about closing the SME funding gap but how accountants can help catalyse bridging the gap.