Dear CEO Letter: SME Lending

The FCA published a Dear CEO Letter today setting out its expectations of Banks who lend to SMEs.

Whilst SME lending sits mostly outside the FCA’s scope, the FCA has called out that any activity undertaken by a SMCR regulated firm is caught by the regime, regardless if the activity is regulated or not.

That being said, the FCA has confirmed that it expects each bank that lends to SMEs to have at least one senior manager responsible for that activity.  It also further noted that it has recently recognised the new Lending Standards Board’s Standards of Lending Practice for Business Customers which is relevant to how relevant employees and senior managers discharge their duties under SMCR.

The FCA reminds CEOs and the Board of their duties in respect of these customers and confirms that the FCA has set up a new small business unit to coordinate activities in this area.



Emma Radmore