The Lending Standards Board (LSB) has unveiled updates to its Standards of Lending Practice for business customers, focusing on enhanced protections and guidance for small and medium-sized enterprises (SMEs). The review identified key areas for improvement, including support for digital services and financial inclusion, as well as guidance on green finance and personal guarantees.
As part of its commitment to support the backbone of the UK economy, the LSB, recognized by the Financial Conduct Authority, aims to ensure fair access and outcomes for SMEs using financial products. The Standards, applicable to around £120bn of UK business lending, will receive updates to aid SMEs navigating digital financial services and to foster the development of sustainable finance options.
Laura Mahoney, head of policy and legal at the LSB, stressed the importance of SMEs having equal access to financial services, stating, “The LSB’s pioneering business Standards play a key role in ensuring this happens and protecting SMEs from harm.”
The LSB’s initiatives include launching guidance for lenders to promote inclusive product design and considering how to extend the Standards to more products and sectors. The review also plans to address the unique financing challenges faced by ethnic minority-owned businesses.
Following the industry-wide consultation, the LSB is set to hold regular forums to discuss the evolving needs of SMEs, regulatory changes, and the Standards’ effectiveness.
