The All-Party Parliamentary Group (APPG) on Fair Business Banking has released its SME Manifesto, presenting a comprehensive strategy for the next government to transform the UK's financial landscape for small and medium-sized enterprises (SMEs).
The report notes that the UK's financial system does not adequately support SMEs, leaving many without access to essential lending opportunities.
Produced in association with WPI Economics and funded by Allica Bank, the SME manifesto sets out a series of policy recommendations for the next Parliament designed to enhance access to finance, streamline regulatory frameworks, and ensure fair treatment for SMEs.
The manifesto recommends that commercial lending to small and medium sized businesses should be subject to the Financial Services and Markets Act (FSMA), the creation of a Financial Services Tribunal (FST) is required to support greater access to justice for SMEs, and the Financial Ombudsman Service (FOS) threshold should be extended to allow more companies to refer complaints to the Ombudsman.
Supporting SMEs to ‘be ready to borrow’ was highlighted in the SME manifesto, as many businesses need help and support that they can trust to be able to access the finance appropriate to them. This could be resolved through a new common approach to signposting.
Increasing the terms of British Business Bank (BBB) support schemes, such as the Growth Guarantee Scheme, is an important requirement, according to the APPG on Fair Business Banking, to help lenders plan and invest in their offerings over the longer term.
The Bank Referral Scheme, which has failed to match customers and lenders at anything close to the scale needed to amplify access to finance, should be “refreshed” to bring more banks in scope, according to the manifesto.
The report also addressed support for SMEs on their green agenda recommending that government should prioritise funding a BBB-backed asset finance product to support small businesses to adopt products and technology that reduces SMEs’ emissions, along with improving guidance and support to SMEs on greenhouse gases (GHG) reporting.
Most importantly the APPG on Fair Business Banking noted that “the Government should ensure the implementation of reforms under Basel 3.1 do not reduce lending to SMEs, as this would be catastrophic for the economy”.
The APPG on Fair Business Banking commented that addressing these areas is essential for unlocking the full potential of the UK's SMEs: “The next government must make these policy priorities a reality, supporting a fairer and more prosperous financial ecosystem for all.”
Paul Scully MP, former Business Minister, noted that, “The recommendations in this manifesto could help to restore Britain’s reputation as the best place in the world to do business. Maximising the value of every penny spent and ensuring businesses are matched to the best lenders is surely a no-brainer. And just making sure that businesses know where and how they can access finance is key to unlocking the various schemes, grants and programmes which are already out there.”
Peter Dowd MP (pictured), Co-chair of the APPG on Fair Business Banking, commented, “It’s within our reach to create a lending environment which allows our small businesses to have the confidence to invest in jobs, skills and innovation, safe in the knowledge that they are properly supported if things go wrong. It’s time to jump that final hurdle and back our SMEs.”
Martin McTague, Federation of Small Businesses’ (FSB) National Chair, is a keynote speaker at AFC’s UK summer conference on 6th June at etc venues, County Hall, London, when he will be discussing what lenders can do to make the SME journey better. For more details, visit the event website at https://afcconferenceuk.com/assetfinanceconnect2024/en/page/home
