The SME Finance Charter: what the 5 pledges mean for business
Updated 16 June 2022
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All businesses need finance. This may come from the owner, from past profits made by the business or from outside – through a bank or another finance provider. If your business relies on outside finance, the SME Finance Charter is for you.
The aim of the Charter is to let you know:
- how UK lenders in general plan to support their business customers
- what this means for your business, if your lender has signed up to the Charter
- how other lenders are responding, so that you can compare
The Charter is a voluntary agreement that covers:
- loans and overdrafts
- asset finance including HP (hire purchase) and leasing
- stock lending
- invoice finance
It has 5 overall pledges that have been signed off by the Business Finance Council, which is a collaboration between finance providers, business organisations and government.
We will publish here a list of the lenders which have signed up to the Charter, along with links to their offers.
The 5 pledges and what they mean in practice
We’re open for business and ready to lend
The Bank of England has said that the banking system is resilient and prepared for the wide range of risks it could face. Your lender will describe their offer to businesses, including the type of applications they are looking to support. They are committed to responsible lending, putting the interests of their customers first and supporting the UK’s economy.
We’ll help you build back better after COVID-19
Lenders supported businesses with over £75.1 billion of lending through government-guaranteed COVID business loan schemes. Lenders now provide various resources to help your business build back better after the pandemic. These might include web resources, fact sheets, videos and workshops, together with face-to-face advice and signposting.
We’ll support your application and signpost other options if needed
Your lender will describe what they expect in an application, for example management accounts, cashflows and any security. They will also explain the options that would be open to you if your application was declined. If you are seeking finance, you should speak to a range of providers to compare different financial products and choose the one that is right for your business.
We’ll treat you fairly at all times
Your lender will explain their commitment to treating customers fairly and how they would resolve any disputes. They may have signed up to an independent scheme such as the Standards of Lending Practice for business customers, the Finance and Leasing Association’s Business Finance Code or the Invoice Finance and Asset Based Lending Standards Framework. Lenders are ready to help their customers through a range of challenges and opportunities. Businesses should get in touch with their lenders if they think there is any situation which may affect their ability to trade or to meet their financial commitments.
We’ll work with the government-owned British Business Bank (BBB) to support SMEs
The British Business Bank is dedicated to making finance markets work better for small and mid-sized businesses. Your lender will signpost to the BBB’s Finance Hub and the Institute of Chartered Accountants in England and Wales’ Business Finance Guide, which offer information on finance options.