FCA publishes feedback statement on supporting SME access to finance

By Simon Lovegrove (UK) & Charlotte Carnegie on September 17, 2026

On 17 September 2026, the Financial Conduct Authority (FCA) published its feedback statement (FS26/2) in relation to supporting small and medium-sized enterprises (SME) access to finance.

Background

In March 2026, the FCA launched its work to understand how FCA regulation affects SME access to finance, including its impact on different firms and sectors. In particular, in relation to whether FCA regulation imposed any significant barriers and whether it should prioritise using any of it levers to improve SME access to finance, given other work and actions in the sector.

Summary

The FCA sets out the following in relation to its findings from this review and proposed actions following its review of these areas:

Findings: Chapter 3 sets out the FCA’s findings on how SMEs access finance and the barriers they face. The FCA emphasises that SMEs are not a homogeneous group and that access-to-finance challenges are most acute for micro-businesses and start-ups. The FCA set out that feedback identified four broad categories of barriers.

Many SMEs struggle with market navigation and preparedness. Businesses may be unaware of financing options, lack confidence or financial capability, find application processes complex, receive insufficient feedback after rejected applications, and experience weak referral or signposting arrangements.
SMEs face difficulties relating to risk assessment and product availability. Asset-light firms may find lenders unwilling to recognise intangible assets such as intellectual property as collateral. Underserved groups, including female, disabled and minority entrepreneurs, may face disproportionate challenges. Stakeholders also highlighted informational barriers, with lenders relying heavily on historic financial information rather than forward-looking indicators.
Respondents identified several regulatory frictions. These included duplication of customer due diligence checks, Consumer Credit Act 1974 (CCA) compliance costs and concerns about capital requirements. However, the FCA and Bank of England analysis suggested capital requirements are not the primary constraint on SME lending.
Stakeholders raised concerns about alternative lending markets and personal guarantee requirements. The FCA concludes that while these issues exist, there is little evidence that FCA regulation itself is a major barrier to SME access to finance.

Proposed actions: Chapter 4 focuses on potential actions that could improve SME access to finance. The FCA makes clear that its central conclusion that regulation is not a major obstacle to SME borrowing. Consequently, the FCA sets out that it sees its role as reducing unnecessary friction while supporting broader government and industry initiatives. As a result, the chapter highlights extensive work already underway across government, which includes initiatives to improve business guidance and preparedness, expand funding through the British Business Bank, improve signposting after rejected applications, enhance data availability for lenders, support underserved entrepreneurs and strengthen standards around personal guarantees. The FCA expects these initiatives to address many of the issues raised during the review. The FCA also identifies three priority areas for its own work:

It will monitor industry efforts to develop digital verification tools that could reduce duplication in customer checks and simplify onboarding while maintaining financial crime safeguards.
It will support delivery of a more proportionate consumer credit regime through ongoing reform of the CCA. The repeal of prescriptive information requirements and sanctions may reduce costs and complexity for lenders while preserving important borrower protections through FCA rules.
The FCA sees significant potential in open finance. Better access to financial data could reduce application friction, improve risk assessment and help SMEs obtain more suitable products. SME lending is identified as a priority use case within the FCA’s open finance programme.