Responsible Finance and Lloyds Bank are piloting an exciting referral initiative designed to enable more businesses to find and access the finance that suits them. Jo Clough, Social Sustainability Director, Lloyds Bank Business and Commercial Banking tells us more in this guest post.
After 23 years in banking, supporting small and medium-sized enterprises through every economic climate, I’ve seen first-hand how important it is that businesses have access to as many sources of finance as possible.
A vibrant SME finance ecosystem means that businesses are better able to find the finance products that suit them and access them in a way that works for them.
The impacts of limited access to finance are starker in areas of high deprivation like the North East of England where I have lived and worked for over two decades. That’s why I’m really excited about the Lloyds CDFI referrals pilot that we’ve launched recently—a partnership with Responsible Finance that seeks to make a real difference for businesses who need it most.
As a Social Sustainability professional, my work is focussed on breaking down socio-economic barriers affecting under-served business communities. And those barriers are stopping businesses from accessing finance, skills, networks and information that is essential for business survival and growth.
CDFIs support businesses that struggle to access traditional finance, including start-ups, those with limited credit history, and enterprises led by women or ethnic minorities. In 2024 alone, CDFIs lent £141.6 million to over 5,000 SMEs, with 94% of recipients previously declined by mainstream finance. Nearly half of these loans went to businesses in the UK’s most disadvantaged areas, and a significant proportion supported women-led and ethnic minority-led firms.
In 2024, Lloyds invested £43million in the new £62million Community Investment Enterprise Fund (CIEF) which supports lending to SMEs via CDFIs. Funding of this magnitude is much needed in the sector but it’s not enough on its own. CDFIs and the support they provide are not well known across the UK. At Lloyds we can play an important role increasing awareness amongst our colleagues and our customers. We are taking it even further and offering customers a referral into a CDFI when bank funding is not an option.
The Lloyds pilot, which launched on 1st September, establishes a process for referring declined lending applications to CDFIs. Over the pilot, we’ll be focusing on loans of up to £250,000. This initiative runs alongside the existing Declined Lending Referral Scheme.
Having worked with many entrepreneurs of all shapes and sizes, I know how vital access to fair finance is for growth and resilience. By partnering with Responsible Finance, Lloyds is not only boosting the lending capacity of CDFIs but also helping build stronger communities. This pilot is a powerful example of our commitment to financial empowerment and our belief in the potential of every business, regardless of background or circumstance.
What next?
- To find out more about this CDFI Referrals Pilot please contact Responsible Finance