The Future of Funding for Small and Medium-Sized Enterprises in the UK

This paper examines the changing landscape of funding for SMEs in the UK. The primary theme of the paper is rapid change - especially the systemic changes instigated by the global financial crisis and the use of new technologies. While mainstream banks continue to be the dominant players in terms of the overall volume of small business lending, these incumbents are beginning to face significant competitive challenges which are likely to boost competition. While this new environment will produce greater levels of competition in the marketplace for small business funding it is likely to present greater regulatory challenges for policy makers given the profusion of new financial providers offering a wider array of financial products to SMEs. This paper aims to synthesise, delineate and consider some of the key issues likely to
confront SMEs, regulators and policy makers in the years to come. However, economic uncertainty caused by Brexit means that assessing these issues with any kind of precision is highly problematic.