High street banks have continued their gradual return to lending for small- and medium-sized enterprises (SMEs) during the second quarter.

This shift comes as the government intensifies its efforts to address the challenges smaller firms face in securing finance, as reported by City AM .

Earlier this year, senior executives were called in for discussions with ministers on ways to enhance lending to SMEs.

In Q2 2025, gross lending to SMEs saw growth cut nearly in half, dropping to eight per cent from 14 per cent in the previous quarter, according to fresh data from UK Finance.

Despite marking the sixth consecutive quarter of loan growth, the rate of increase took a hit.

This follows a report from the Department of Business and Trade in March which revealed that overall loan succe

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