The Finance & Leasing Association (FLA) has welcomed the FCA’s new Feedback Statement on supporting SME access to finance, which identifies a number of regulatory frictions that can make it harder for finance providers to serve smaller businesses.
The FCA concludes that its regulation is not a major barrier to SME finance, but highlights opportunities to reduce unnecessary friction, including through digital verification, Consumer Credit Act reform and the development of open finance.
The FLA supports this approach. Regulation should protect customers while enabling finance to flow to the businesses that need it. Where regulation adds unnecessary cost, duplication or complexity, it can make some forms of finance harder to provide and ultimately risk restricting choice for businesses.
The FCA’s focus on a more proportionate regulatory regime is therefore welcome. The test for regulation should be whether it delivers better outcomes for customers while allowing responsible lenders to provide finance efficiently and sustainably.
The FLA and its members will continue to work with the FCA and Government to ensure that regulatory reform supports both strong customer protection and access to finance for the UK’s small and medium-sized businesses.
