Top banking executives were called for discussions with ministers on Tuesday following a government report highlighting the struggles of small businesses in securing loans.
Senior figures from HSBC, Natwest and Lloyds are expected to attend the meeting, chaired by the minister for small business, Gareth Thomas, as reported by .
A March report from the Department of Business and Trade revealed that overall loan success rates for firms applying for bank finance fell below 50 per cent – a significant drop from an approval rate of 67 per cent in 2018.
The meeting, first reported by The Guardian, precedes the government's closure of its review into small businesses' access to finance on May 8.
Research from the British Business Bank indicates a drastic shift in SME lending since 2019 – when the four largest banks accounted for 90 per cent of lending.
Since 2024, Challenger banks have been responsible for 60 per cent of annual gross bank lending to SMEs.
'Dramatic collapse' in SME lending
Allica Bank, the º£½ÇÊÓƵ's fastest-growing fintech catering to SMEs, disclosed a "dramatic collapse" in SME lending of up to £65bn over the last 25 years.
The fintech has been actively lobbying the government to "fix the SME finance market for the long-term – not as a narrow market issue, but as a key enabler of reinvigorated º£½ÇÊÓƵ economic growth and productivity."
A º£½ÇÊÓƵ Finance spokesperson, representing the banking and financial services sector's industry body, commented: "The government is currently seeking views on access to finance for SMEs, which are a vitally important part of the º£½ÇÊÓƵ 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 is set to unveil the Treasury's first-ever Financial Services Growth and Competitiveness Strategy on July 15. Since the start of the year, Reeves has been engaging with top executives from the financial services industry to discuss ways to stimulate growth.
A government spokesperson remarked: "The last few years have been incredibly difficult for business."
They continued: "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."
