The ministers will celebrate a high -level meeting with the main bank executives on Tuesday as the pressure on lenders increases to improve access to credit for small businesses, amid the growing fears that the economic recovery of the United Kingdom can be retained by a substation.
The senior figures of HSBC, Natwest and Lloyds will attend the conversations to explain that they plan to support the government’s growth strategy, partly through greater loans to small and medium enterprises (SME). The meeting comes a few days before the government concludes an important review of access to SME finances, which could lead to new regulatory obligations for banks.
Rachel Reeves, the Chancellor, has raised Conerns that the restrictive loan practices of street banks, including the requirement of personal guarantees and centralized decision making, are hindering the capacity of small businesses to invest and grow.
“The last years have incredible leg for business,” said a government spokesman. “That is why this Pro-Negocio government is determined to improve the total business environment, even for small businesses.”
Government data show that just under 50% of SME loans requests are obtained, below 67% in 2018. The Business and Commerce Department (DBT) said that the fall raises “questions about whether these rejection rates are also also.”
Many small businesses have resorted to high -risk private lenders after being rejected by banks, which caused greater financial resistance in the sector, which is crucial for jobs, exports and innovation of the United Kingdom.
It is expected that the representatives of the bank industry argue that they are willing to lend more, but that the highest risk profiles of SME hinders this in current conditions. It is likely to request an expansion of the British Business Bank Bank guarantee scheme, which currently subscribes to 70% of the qualified loans.
Trade Group UK Finance has pressed for more government funds to support this guarantee, saying that it is the only way to expand the loans of SMEs safely.
The meeting will be chaired by Gareth Thomas, minister of small businesses, who has been supplied by the loss of personal relationships and SMEs. He has criticized the change to loans only online and, according to reports, he is interested in expanding mutual lenders, who play a key role in SME loans in countries such as Germany.
Thomas’s frustration reflects the findings of a 2023 Treasury Committee report, which accused the “harmful” banking practices sector and harmful financial regulation. He highlighted the closure of 140,000 bank accounts of SME last year, or without a clear explanation, a practice labeled as “debit” by critics.
The report concluded that SMEs, already weakened by high inflation, energy prices and pandemic interruptions, now face unnecessary barriers to finance the risk of querying innovation and long -term growth.
As the ministers prepare to conclude their financial review, the next meeting may be a fundamental time to determine whether the voluntary reforms of the large banks will be enough, or if the strongest intervention is on the horizon to grow, export the businesses of the funds.
Jamie Young
Jamie is a senior reporter of Business Matters, who brings more than a decade of experience in commercial reports of the United Kingdom. Jamie has a business administration title and participates regularly in conferences and industry workshops. When he does not inform about the last business development, Jamie is passionate about the mentoring of promising journalists and businessmen to inspire the next generation of business leaders.
