With potentially thousands of SMEs lining up to secure funds necessary for expansion or consolidation, new lending standards have now been introduced to ensure the safety of those borrowing money.

The new Standards of Lending Practice will replace the existing Lending Code, bringing enhanced protections for a wider range of businesses.

In addition to extending coverage from micro-enterprise customers to include businesses with a turnover of up to £6.5m, the standards will also give firms greater insight into lenders’ decision-making process.

“Small businesses will now have the right to understand why a lender has declined their application, enabling them to review their existing business models and requirements going forward,” explained Craig Farmer, chief risk officer at SME finance provider Fleximize.