The Financial Conduct Authority has published a feedback statement concluding that its regulation is not a major barrier to small and medium-sized enterprises accessing finance, although regulatory and market frictions remain. The review focused on business lending of GBP 25,000 or less to sole traders and small partnerships within the consumer credit perimeter. It found that smaller firms can struggle with financial readiness and market navigation, while lenders face difficulties assessing risk and offering suitable products. The FCA will monitor industry work on digital verification to reduce duplicated customer checks while preserving financial crime controls, and will develop a proportionate rulebook as part of Consumer Credit Act reform. Building on its open finance roadmap, it will also prioritize SME lending as a high-impact use case to improve data availability, credit assessment and application processes. A discussion paper scheduled for early 2027 will set out options for the first open finance scheme, with SME lending among two prioritized use cases.
2026-09-15Financial Conduct Authority
Financial Conduct Authority finds regulation is not a major barrier to SME finance, targets customer checks, credit rules and open finance
The Financial Conduct Authority found no evidence that its regulation is a major barrier to SME finance, but identified frictions in customer checks, credit requirements, market navigation and risk assessment. It will pursue digital verification, Consumer Credit Act reform and open finance, with an early 2027 discussion paper covering options for an initial open finance scheme.