The guidance comes after an industry-wide consultation, as well as compliance and research findings by the LSB, and includes suggestions around how SMEs apply for or access financial products online.
The LSB’s business standards outline the best practice for lending to SMEs, and are formally recognised by the Financial Conduct Authority (FCA), applying to around £120bn of business lending.
The consultation found certain areas where the standards could be improved, including:
- Further guidance for firms on applying the standards across digital channels
- Updating guidance to support firms offering sustainable products and services, given the evolving regulatory approach taken towards green finance
- Improved guidance on personal guarantees
- Guidance for lenders on promoting inclusion, ensuring they consider a broad range of SME circumstances and needs in their product design
- Exploring how standards could be extended to a wider range of products and sectors
Laura Mahoney, head of policy and legal at the LSB, said that it was crucial SMEs have access to the same fair outcomes as consumers, with the consultation having revealed that further work was needed on digital channels and green finance.
She continued: “Our review, as well as our work over the past 12 months, has identified a number of barriers that businesses face when accessing finance – whether it’s their ability to access sustainable finance, or the challenges that ethnic minority-owned businesses can encounter when looking for new lending.
“We look forward to engaging with lenders and the business community on lowering these barriers and ensuring the business standards are fit for the future – and can continue to support SMEs as they support the economy.”
