FCA to investigate use of personal guarantees in certain small business lending

Summary:

The Financial Conduct Authority (FCA) has announced an investigation into the use of personal guarantees by lenders to support loans to certain small businesses. This move comes in response to a super complaint filed by the Federation of Small Businesses (FSB), which raised concerns that the growing demand for personal guarantees is having a detrimental impact on small businesses and discouraging them from borrowing to grow. The FCA will collect data, review lender policies, work with the Financial Ombudsman Service, and consider providing guidance to lenders on applying FCA rules and guidance when personal guarantees are in place. The aim is to understand whether lenders' practices are causing unnecessary barriers to growth and, if necessary, take action to remove them within the FCA's remit.