UK Chancellor announces new support for SMEs with plans to accelerate Open Finance

Source: Gov.UK

The UK Chancellor Rachel Reeves has outlined a series of measures to support the evolution of SME finance in the UK, including plans to advance Open Finance, broaden lending opportunities for small businesses and introduce reforms designed to improve access to growth capital.

Included is the expansion of the British Business Bank’s (BBB) highly successful Growth Guarantee Scheme (GGS) which provides a 70% government guarantee on commercial loans to SMEs of up to £2 million, cutting credit risk and turning ‘nos’ into ‘yeses’.

Since its launch in 2022, the scheme has delivered over £3.7 billion of financing to UK SMEs with £2.5 billion of this reaching businesses outside of London and the Southeast.

Additional measures include:

• Expanding digital business support through the Business Growth Service: One year on from its launch, the Business Growth Service has supported 750,000 users and will enter its next phase of development, with a focus on expanding digital support for businesses. This includes the launch of a financial readiness programme, developed in collaboration with industry stakeholders and public institutions, to bring together financial education, Business Academy content, roadshows and access-to-finance support into a more coordinated offer for SMEs.
• Accelerating the development of Open Finance: The government intends to accelerate the development of Open Finance in the UK, with an initial focus on SME lending. The government will consult in 2027 on how best to deliver and harness the benefits of Open Finance in the UK.
• Removing barriers to SME lending: Legislative changes will be made to help building societies increase their support for SME lending.
• Unlocking finance for scale-up businesses: The government has published its review of ring-fencing, setting out a comprehensive package of reforms which will unlock financing for scale-up firms, including through a ‘New Growth Allowance’. The government will publish its formal consultation on these proposals as part of the Chancellor’s Mansion House Speech.
  

  Paul Thwaite, chief executive officer of NatWest Group,

Paul Thwaite, chief executive officer of NatWest Group, said: “We welcome the changes announced today. As the UK’s biggest bank for business, this will allow us to deepen our support for firms, lending in the region of £1bn through the Government Guarantee Scheme over the next three years.”

Amanda Murphy, chief executive officer, business and commercial banking, Lloyds Banking Group, said: “Lloyds Banking Group welcomes the planned expansion of the Growth Guarantee Scheme. With these changes, the scheme could enable us to provide up to £1 billion of lending by 2029, helping to support more businesses that may not otherwise have been able to access finance. We have already committed to provide £35 billion of new finance to businesses across the UK this year, including £9.5 billion for SMEs, helping businesses across the UK invest for the future, create jobs and drive growth in their local economies.”

Stuart Tait, head of commercial banking, HSBC UK, said: “HSBC UK is committed to providing SMEs with the finance, tools and confidence they need to grow their business. Last year, we made an additional £5 billion of lending available to UK SMEs until 2030 while our Small Business Growth Programme has reached over two million SMEs in the last year, providing free training, events and insights.”

Conor Hillery, co-chief executive officer of EMEA at JPMorganChase, said: “Small businesses drive the UK economy, but too many entrepreneurs struggle to access the finance they need to grow. Building on more than two decades of experience supporting CDFIs in the US, and reinforcing our commitment to expanding access to finance in the UK, we’re announcing a total £10 million in philanthropic funding to strengthen CDFIs’ technology, leadership and operations—helping them attract more capital, increase lending and reach more underserved communities.

“JPMorganChase is proud to be part of the Community Finance Taskforce, bringing together the government, finance industry, and the social sector to help build a more inclusive small business finance market that supports lasting economic growth.”

Richard Davies, chief executive officer of Allica Bank, said: “We are delighted the Chancellor has backed Britain’s smaller businesses by supporting lenders like Allica to supercharge its growth lending to businesses. Allica plans to deliver over £8 billion of new SME lending over the next 3 years, and the substantial expansion to the GGS and Enable schemes will play a vital part in enabling this additional lending.

“An expanded GGS will drive economic growth right across Britain, with four in every five jobs supported by Allica’s GGS lending located outside London and the South East.”

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