UK Finance has responded to the Treasury Select Committee call for evidence on availability of finance for SMEs. Its response notes that 2022 saw the highest SME lending since comparable records began in 2012, on the back of the large legacy debt under the Covid lending schemes. It says that against the backdrop of SMEs who borrowed under Covid lending schemes now often having healthy cash deposit levels, demand for finance is generally subdued – but the lending sector is welling and able to make loans to viable businesses. The detailed response includes observations on:
- the need for regulatory intervention to be proportionate, and not hamper the market while ensuring lenders act responsibly;
- the importance of continued focus on agile, outcome-focussed solutions – noting that any expansion of the regulatory perimeter or removal of the SME support factor under Basel 3.1 could have implications on cost and availability of SME finance;
- UKF’s support for extension to the FOS remit with the demise of the BBRS; and
- the integral purpose that the BBB serves to support SME access finance.