£11bn pot promised to small businesses by UK’s top banks – how to apply

The Government has announced that five major UK banks have committed to a “landmark” £11bn lending package designed to help SMEs invest and expand abroad.  

Led by Business Secretary Peter Kyle, the agreement comes at a time when traditional lenders and their efforts to support SMEs are under the spotlight. A group of Labour backbenchers is currently driving reform of banks’ efforts to support SMEs through the Fair Banking Act. 

Although it has not passed as legislation as yet, it does highlight big concerns that traditional avenues to finance are currently problematic for SMEs; and the business finance landscape has changed as a result.

What is the new pot?

The £11bn is earmarked to “help firms invest, hire and expand into new international markets”, and comes fresh off the Prime Minister’s return from trade trips to both China and Japan. 

The roundtable event at which the agreement was signed was attended by Kyle, alongside senior executives from NatWest, HSBC UK, Barclays, Lloyds, and Santander. The deal was lauded as “one of the largest collective moves by the banking sector in over a decade”, and described by Chancellor of the Exchequer Rachel Reeves as providing “the firepower” for SMEs “to take on the world”. 

The agreement also includes “advisory support through banks’ relationship managers” and regional managers from the government’s export credit agency, UK Export Finance (UKEF). UKEF will also guarantee up to 80% of eligible loans issued by each bank. 

How can businesses apply?

Businesses can apply straight away. We talked to a spokesperson from UKEF, who told us: “Business can apply now for a loan directly with the participant banks. They can start by speaking to their high street lender or their regional UKEF Export Finance Manager.”

The spokesperson added: “Each bank has its own criteria, so we encourage firms to speak directly to their preferred lender about the support available.”

Changing trade landscapes

The push for SMEs to expand overseas and bolster their international trade comes as the UK tries to navigate a very volatile and shifting trade landscape. Businesses have been hit hard by the tariffs levied by the Trump Administration and the uncertainty that has come with them. 

Just days ago, research from Paragon Bank revealed that more than one in five of the nation’s SMEs are facing the tariff threat as their single biggest challenge. A quarter of the businesses quizzed said that their profit margins have been directly impacted, and 17% are recording reduced sales. 

Nearly a quarter added that the continued uncertainty around the tariffs is affecting their ability to strategise on the future of their venture. 

New horizons

This breaking of the old order has seen the Government look to different markets. Prime Minister Keir Starmer visited China last month and has now announced a deal that could make it easier for British businesses to access one of the world’s biggest markets. 

While details are still being bashed out, the first change is that British citizens staying in China for less than 30 days will no longer have to apply for a visa, which is an immediate boon for small businesses without large travel budgets. 

However, the Government is also pursuing closer trade ties with the EU, and according to BBC News, the bloc is “open-minded” and “ready to engage”. 

The European Commissioner for Finance, Valdis Dombrovskis, has mooted the possibility of the majority of food checks being removed between the EU and UK, and the establishment of a customs union, which would eliminate some tariffs and cut down red tape. 

For SMEs who are struggling with the uncertainty or have traditionally been reliant on US sales, the new lending scheme could provide the impetus to diversify their customer base and explore new possibilities.