Lending Standards Board adds SME lender iwoca to business Standards registration
The Lending Standards Board’s (LSB) has announced iwoca, one of Europe’s largest SME lenders, as its latest firm to achieve full registration to the Standards of Lending Practice for business customers (‘the business Standards’).
The LSB’s business Standards set the best practice benchmark for SME lending in the UK and can be applied across a range of financial services firms, from digital or challenger firms to high-street banks. They are one of just four industry codes recognised by the FCA.
iwoca’s full registration with the LSB follows the completion of its interim registration period, during which the fintech SME lender worked with the LSB to ensure its compliance with the Standards.
Emma Lovell, chief executive at the LSB added: “We are delighted to welcome iwoca into full registration with the business Standards. The more firms registered with these Standards, the more SMEs who are protected. iwoca are helping to lead the way for other digital financial providers to prioritise SME protections, building trust between SMEs and the financial services sector. Registered firms are committed to upholding the highest standards of conduct in lending – delivering tailored and sustainable outcomes to customers amid a challenging economic environment.
“SMEs should always check their finance provider is LSB registered if they want to make sure they have access to independent lending protections.”
The business Standards provide a framework for how registered firms treat their SME customers and are backed up by the LSB’s independent compliance oversight. The Standards were written specifically for SMEs as a distinct customer group and cover things like SMEs’ access to advice, how firms should communicate with SMEs, personal guarantees, or how firms should approach declined applications.
While the FCA’s regulatory perimeter excludes business lending over £25,000 and lending to limited companies, the business Standards cover lending products provided to all SMEs with a turnover up to £25m, with enhanced protections for SMEs with a turnover up to £6.5m.
Seema Desai, chief operations officer at iwoca added: “Our registration with the LSB’s business Standards provides assurance to our customers that we continue to put fair treatment of our SME customers at centre-stage, and is a sign of our commitment to the highest standards of conduct.”
Recent RFI Global research on behalf of the LSB revealed that 20% of SMEs intend to take out lending products in the next 12 months.
Meanwhile, a survey for the LSB by Opinium, found that 68% of SMEs would be more likely to trust an LSB-registered firm and 88% of SMEs say it is important that financial services providers are subject to independent oversight by bodies like the LSB.
More information on the Standards can be found here.
