HM Treasury has published a consultation and call for evidence on enhancing the UK Bank Referral Scheme, which requires designated lenders to offer rejected SMEs a referral to designated online finance platforms where they can be matched with alternative finance providers. The paper tests potential legislative and operational changes to increase referrals and reduce drop-out, following a post-implementation review that found only a small share of rejected SMEs ultimately secure finance through the Scheme. Key proposals include widening the designation framework so the Scheme can apply to a broader set of finance providers than “banks” alone, potentially capturing significant non-bank lenders such as building societies, and expanding designation criteria to consider business banking services including current account provision. Other options include allowing non-designated lenders to opt in voluntarily, standardising when and how SMEs are informed about the Scheme earlier in the application journey, broadening the circumstances that trigger a referral including where no lending decision is communicated within a set period, requiring lenders to provide rejection reasons where lawful, and requiring platforms to signpost SMEs to impartial advice services if finance is not secured. HM Treasury also seeks views on streamlining consent and data-sharing to reduce duplicate information requests, setting minimum standards for the end-to-end process via regulation or guidance, and taking a new statutory power to collect and publish Scheme statistics from designated banks as well as platforms. The consultation runs from 27 October 2025 to 22 December 2025. HM Treasury will assess responses and may pursue changes through guidance, revised designations, or legislative amendments, which could require secondary or primary legislation.

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