On 17 December 2024, the Lending Standards Board (LSB) published a summary report on its review of registered firms’ application of the Standards of Lending Practice for business customers.

Background

The Standards, which are recognised by the Financial Conduct Authority, set out the best practice framework for small and medium-sized enterprise (SME) lending and are considered the only lending protections available to many UK SMEs. Firms that sign up to the Standards are committed to delivering better outcomes for their SME customers, and to independent oversight of their SME lending practices.

Review findings

The report summarises the findings of the LSB’s latest review of how firms are putting the Standards into action, emphasising how effectively the Standards are driving improvements in the firms’ treatment of SMEs, and identifying areas of best practice, shortcomings and the corrective actions taken where needed.

In the report, the LSB highlights the steps firms must take to improve their treatment of SMEs in financial difficulty, including better signposting to support mechanisms, as well as improvements to affordability assessments and the quality of customer communications.

The LSB notes that the FCA’s regulatory perimeter prevents it from overseeing financial services firms’ lending above £25,000 to business, or lending to limited companies, whereas the Standards have a wider scope and cover register firms’ business customers with turnovers up to £25m.