UK FCA sets out next steps to support SMEs with access to finance

The UK Financial Conduct Authority (FCA) has published a feedback statement (FS26/2) from its review into whether regulation affects small and medium-sized enterprises' (SMEs) ability to access finance. The review found no evidence that FCA regulation is a major barrier to SME lending, but instead, found that many of the challenges relate to the wider market, information and capability. This is particularly the case for microbusinesses, who face issues such as limited awareness of finance options, complex application processes, duplicated customer checks and difficulties obtaining finance where businesses have limited collateral or predominantly intangible assets.

To reduce friction and support growth, the FCA has identified three priority areas for further work: (i) supporting a more proportionate regulatory framework through reform of the Consumer Credit Act; (ii) advancing open finance with SME lending as a priority use case; and (iii) monitoring industry work to explore whether digital verification could reduce duplication in customer checks, while maintaining effective financial crime controls.

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