(6 May 2025 – United Kingdom) Government ministers will meet with senior executives from leading UK banks on Tuesday to discuss ways lenders can support the government’s economic growth ambitions, amid growing alarm in Whitehall over dwindling credit availability for small and medium-sized enterprises (SMEs).
Top representatives from HSBC, Lloyds, and NatWest are expected to present their strategies for supporting business lending, following mounting criticism from SME advocates and business groups over post-pandemic restrictions that have choked off credit to firms eager to invest and expand.
The meeting is scheduled just days before the government’s official review of SME lending concludes. Ministers are reportedly weighing whether to enforce new requirements on major banks to improve access to affordable finance for small businesses.
Chancellor Rachel Reeves has signalled concern that limited credit from traditional high street lenders may constrain growth among SMEs.
Small business owners have voiced frustrations about increasingly burdensome lending practices, such as the demand for personal guarantees and the loss of local decision-making following the centralisation of lending processes. Many have pointed to the erosion of branch-based relationships as a key barrier.
Banking industry figures are expected to reiterate their willingness to lend, but also stress that the current risk landscape requires enhanced government-backed guarantees. At present, the British Business Bank underwrites up to 70 percent of loans made to eligible SMEs. However, industry group UK Finance has called for the program to be expanded and backed with increased funding to make wider lending feasible.
Small Business Minister Gareth Thomas, who will chair the upcoming meeting, is reportedly dismayed that many SMEs have been cut off from in-branch banking relationships, relying instead on digital forms to access credit. Thomas, a long-standing advocate of mutual lenders from his time as chair of the Co-operative Party, has championed the expansion of alternative lending models like credit unions and building societies, drawing on the example of Germany’s robust mutual lending ecosystem.