UK ministers to meet bank bosses over small business lending amid access and ‘debanking’ concerns

Ministers will hold a high-level meeting with leading bank executives on Tuesday as pressure mounts on lenders to improve access to credit for small businesses, amid growing fears that the UK’s economic recovery could be held back by underinvestment in the SME sector.

Senior figures from HSBC, NatWest and Lloyds will attend the talks to explain how they plan to support the government’s growth strategy, particularly through increased lending to small and medium-sized enterprises (SMEs). The meeting comes just days before the government concludes a major review into SME finance access, which could lead to new regulatory obligations for banks.

Rachel Reeves, the chancellor, has raised concerns that restrictive lending practices by high street banks — including the requirement for personal guarantees and centralised decision-making — are hampering small businesses’ ability to invest and grow.

“The last few years have been incredibly difficult for business,” said a government spokesperson. “That’s why this pro-business government is determined to improve the total business environment, including for small businesses.”

Government data shows that just under 50% of SME loan applications are approved — down from 67% in 2018. The Department for Business and Trade (DBT) said the drop raises “questions as to whether these rejection rates are too high and why this may be the case.”