CFIT says financial health tools could unlock £5bn in SME lending

New research from the Centre for Finance, Innovation and Technology (CFIT) suggests that up to £5 billion in additional lending could be unlocked for UK small and medium-sized enterprises (SMEs) through the wider adoption of financial health tools.

The findings were unveiled on Monday at a London event attended by senior leaders from across financial services, fintech and government, including Small Business Minister Blair McDougall MP. The report marks the outcome of CFIT’s third industry coalition, focused on addressing long-standing barriers to SME finance.

SMEs account for more than 99% of UK businesses, yet many continue to face challenges accessing funding. According to CFIT, these issues are often driven by fragmented financial data, limited visibility into business performance, and inefficiencies in the lending process.

The coalition’s report argues that improving SMEs’ understanding of their financial position, combined with better guidance from lenders, could significantly enhance lending outcomes and support economic growth.

Central to the report is the concept of Financial Health Tools, including SME-focused dashboards designed to give businesses clearer insights into their financial data and readiness for funding.

These tools aim to bridge the gap between lenders and borrowers by helping SMEs better present their financial position, while enabling lenders to make more informed credit decisions.

“This report from CFIT demonstrates the power of collaboration between industry and Government to tackle complex, systemic challenges. It sets out clear, practical steps to improve how finance is accessed and delivered, including the role that smart data and innovation can play in supporting small business growth.”

“Too many viable businesses are being locked out of finance not because capital is unavailable, but because they lack the visibility and guidance needed to be finance ready,” she said.

“CFIT’s role has been to bring the market together, test practical solutions, and show that there is a credible path to scale. The next step is clear: for lenders to embed these tools into the finance journey, and for Government to support the implementation of an accountability framework that allows them to work at scale. “

The launch event brought together stakeholders from across the lending ecosystem, including banks, fintechs, data providers and policymakers, to discuss how the recommendations can be put into practice.

Panel discussions focused on the role of data and technology in improving credit decisions, as well as how artificial intelligence and digital tools can strengthen SME resilience and growth.

CFIT is now calling on lenders to embed financial health tools at every stage of the borrowing journey, from pre-application through to post-decision, while also encouraging government support to scale adoption.

The report also highlights the role of public sector channels in improving financial literacy among SMEs and strengthening the infrastructure needed to support better business identity and data sharing.

By addressing structural inefficiencies and improving financial transparency, CFIT believes the UK can unlock significant untapped lending capacity, delivering benefits not only for SMEs but for the wider economy.

With a clear implementation roadmap now in place, the focus shifts to industry and government stakeholders to turn recommendations into action and drive meaningful change in SME access to finance.