Ministers will convene with executives from major banks on Tuesday to address concerns about accessibility to funding for small businesses. Criticism from business groups has surfaced, claiming insufficient credit for vital investments amidst the post-pandemic recovery. Ahead of a lending review deadline for small and medium-sized enterprises (SMEs), the discussions will assess how banks can support growth strategies. Approval rates for business loans have dropped since 2018, raising alarms about lending practices and availability, driving some businesses to seek funding from riskier, non-bank lenders.
There will be a number of reasons why small businesses are rejected but there is a question as to whether these rejection rates are too high and why this may be the case.
Rachel Reeves is concerned that restrictions on lending by high street providers will hold back SMEs that want to expand and help the economy to grow.
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