Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what assessment he has made of the proportion of (a) businesses whose lending and (b) funds lent to businesses which is regulated by the Financial Conduct Authority.

The Government is committed to extending the regulatory perimeter only where there is a clear case for doing so, in order to avoid putting additional costs on lenders that would ultimately lead to higher costs for businesses.

However, unincorporated sole traders and small partnerships borrowing less than £25,000 do receive regulatory protection. In practice, the effect of this is that the smallest SMEs are more likely than not to receive regulatory protections when borrowing.

The Financial Conduct Authority estimated in their 2015 Discussion Paper “Our approach to SMEs as users of financial services” that between 2010 and 2014, 41% of all the loans and overdrafts applied for by SMEs could potentially fall within the regulatory perimeter