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New working group to examine and lobby on SME lending contracts

Two UK organisations are joining forces with cross party MPs to examine how fair SME lending contracts are and work to improve them.

The working group is made up of representatives from UK Finance, members of the Lending Standards Board (LSB) and MPs. At the time of writing this article, seven major banks that operate in the UK have also signed up. The group is lead by

the consultancy firm Momentous Change.

In addition, this working group is consulting with several other relevant UK organisations. This includes the SME Alliance, the Federation of Small Businesses and the Chartered Banker Institute.

The group is also using the findings of various studies and inquires to quickly tackle the more obvious issues with SME lending. For example, the Financial Conduct Authority´s findings that a lack of transparency about contract terms was one of the reasons so many RSB SME clients ended up getting into financial difficulties.

Accountants from Spital to Bebington are watching the progress of this groups work with interest. They know that one of the biggest challenges their clients face is securing enough funding to grow their businesses. Most accountancy firms are asked to provide financial reports to help their clients to secure loans and funding.

Anything that makes it easier for the SMEs they work for to borrow money is likely to be welcome. As is clearer terms and conditions. This change also makes it far easier to understand how to plan the repayments of the loan and understand the true cost of borrowing the money.

Posted by Mark
June 19, 2018
General

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