A new business overdraft platform has been launched to address the lack of funding options for SMEs in the UK.

Growth Street offers flexible business overdrafts of up to £150,000 and uses cloud-based software to offer insight into the financial health of SMEs.

James Sherwin-Smith, CEO at Growth Street, said: “SME 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 SMEs from managing their cash flows effectively.”

SME funding by banks has been a topical issue following concerns raised by the Competition and Markets Authority (CMA) in its October review.

The CMA report said information amongst credit reference agencies should be shared out more effectively to give SMEs greater choice when looking for financing.

The CMA said this would also eradicate unnecessary form filling.

This view is supported by Conrad Ford, CEO of Funding Options, who said: "A single-application service for small businesses seeking finance would make a huge difference for small businesses - how many of them have the senior management time to spend days filling in numerous virtually identical forms?

"It is possible to apply for funding to multiple alternative lenders with just one online application.

“This is not currently an option for SMEs seeking finance from the banks, but the capability already exists in online business finance supermarkets like Funding Options."

James did, however, say that banks are intentionally limiting the finance options for SMEs.

He added: “In our view, the banks are diverting SMEs away from business overdrafts towards complex invoice finance products which hide the true cost of credit. 

“As a result, SMEs are increasingly stung by complex contracts and extortionate, opaque fees they’re not expecting.

“This is strangling SME growth and is the next UK financial scandal in the making.”