Ministers call in HSBC, Natwest and Lloyds bosses for small business lending talks
Top bank bosses were summoned for talks with ministers on Tuesday after a government report revealed that small businesses were having difficulty securing loans.
Senior executives from HSBC, Natwest and Lloyds will be in attendance for the meeting, which will be chaired by minister for small business Gareth Thomas.
A report from the Department of Business and Trade in March revealed overall loan success rates for firms applying for bank finance were below 50 per cent – down from an approval rate of 67 per cent in 2018.
The gathering, which was first reported by the Guardian, comes ahead of the government closing its review on small businesses’ access to finance on May 8.
Research from the British Business Bank shows the landscape for SME lending has drastically changed since 2019 – where the four largest banks made up 90 per cent of lending.
Since 2024, Challenger banks have accounted for 60 per cent of annual gross bank lending to SMEs.
‘Dramatic collapse’ in SME lending
Allica Bank, the UK’s fastest growing fintech catering towards SMEs, revealed a “dramatic collapse” in SME lending of up to £65bn over the last 25 years.
The fintech has been at the forefront of lobbying the government to “fix the SME finance market for the long-term – not as a narrow market issue, but as a key enable of reinvigorated UK economic growth and productivity.”
A spokesperson for UK Finance – the industry body for banking and the financial services sector – said: “The government is currently seeking views on access to finance for SMEs, which are a vitally important part of the UK economy.
“We attended a very constructive government meeting today and talked through the range of funding and support available from banks and other lenders to help SMEs grow. To help unlock even more lending, we think the Growth Guarantee Scheme could be made permanent and the size of the scheme’s budget could be increased.”
Chancellor Rachel Reeves will also publish the Treasury’s inaugural Financial Services Growth and Competitiveness Strategy on July 15. Reeves has courted leading executives of financial services firms since the beginning of the year for discussions to boost growth.
A government spokesperson said: “The last few years have been incredibly difficult for business.”
They added: “We know the vital importance of small businesses to our economy and delivering the plan for change. That’s why we are now focused on working with banks to create opportunities for businesses to access the finance they need to scale, export and break into new markets.”