The Lending Standards Board (LSB) has published the outcomes of its review of the Standards of Lending Practice for business customers (‘the business Standards’), identifying new opportunities to strengthen customer protections with practical guidance for banks and lenders.
Following an industry-wide consultation, and drawing on its own compliance and research findings, the LSB will enhance its guidance on digital journeys and how SMEs apply for or access financial products online. It will also build upon its industry-leading financial inclusion work by helping banks and lenders improve the processes and procedures they have in place to support businesses and entrepreneurs with specific or unique needs.
The LSB’s business Standards set the benchmark for best practice in lending to UK SMEs with a turnover of up to £25 millio, and provide the only protections of their kind across the lifecycle of lending products. The Standards are outcomes-focused, are formally recognised by the Financial Conduct Authority, and apply to approximately £120 billion of UK business lending.
Laura Mahoney, the LSB’s Head of Policy and Legal, said: “SMEs are the backbone of the UK economy so it’s vital that they have the same access to fair outcomes when using financial products that consumers enjoy. The LSB’s pioneering business Standards play a key role in ensuring this happens and protecting SMEs from harm.
“The financial services industry is dynamic and constantly evolving, so keeping our Standards under review is critical to ensuring they continue to uphold our commitment to fairness and excellence in customer outcomes for businesses. This consultation evaluated emerging areas in business lending, such as the use of digital channels to deliver lending products and green finance, to ensure the Standards reflect, and are responsive to the changing economic and business environment. We’re also building on our groundbreaking work on financial inclusion, to make sure businesses get the support they need regardless of their owners’ backgrounds or specific needs.”