#small-business-lending

#small-business-lending

The last few years have been the hardest this industry has ever seen, and Knolly has not been immune. But we have been fighting through it: restructuring costs, tightening operations, and doing the difficult work of right-sizing the business to match a new reality. We were making progress.

Ministers are seeking "concrete commitments" over the next five years to expand funding for the community development financial institution (CDFI) sector, not-for-profit lenders that support businesses unable to secure loans from mainstream banks. The initiative follows a review which found that many small firms are being pushed towards high-cost borrowing because of rising rejection rates, regulatory complexity and broker practices.

Gareth Thomas, a former business minister, has tabled a 10-minute rule bill that would require banks to measure, disclose and improve how they serve underserved communities and smaller firms. The proposal mirrors the US Community Reinvestment Act, which obliges American banks to demonstrate how they support poorer areas and small enterprises. Thomas said the cost of living crisis had exposed deep weaknesses in access to affordable credit across the UK economy.

"Securing capital remains a significant hurdle for small businesses striving to grow and scale,"

When Dominique Thornhill tried to get a loan to launch a child-care center in 2020, every conventional bank she approached glanced at her thick business plan and slim finances, then turned her away. "I thought that's what small-business loans were supposed to support, but I didn't receive that support at all," the former Pittsburgh-public-school teacher told me. "Instead, it was Come back to us when you're already established."