HM Treasury has published its response to consultations on two parts of the UK's SME finance framework: Commercial Credit Data Sharing (CCDS) and the Bank Referral Scheme (BRS). Neither was designed with charities in mind, but both have implications for the sector.
The two schemes
CCDS requires designated banks to share SME credit data with credit reference agencies, which then pass it to other finance providers. The consultation looked at strengthening the regime through standardised data formats, tighter submission timelines, and better data correction processes. The government intends to take reforms forward, though this will need primary and secondary legislation, so implementation is some way off.
The BRS requires major lenders to refer rejected SME applicants to platforms offering alternative funding. Here, the government is opting for industry-led improvements rather than legislative change.
Why charities should pay attention
The government has indicated an intention to bring charities and not-for-profits into scope of CCDS. That would mean charity banking and borrowing data being shared more systematically with credit reference agencies, giving lenders greater visibility of organisations' financial positions which could, in principle, support better access to finance.
The detail will matter, though as charity finances can be quite different to those of businesses. Restricted funds, reserves policies, trading subsidiaries and grant income can all affect how creditworthy charities can appear to leders.
What happens next
There's no immediate compliance requirement for charities, but CFG will monitor the details and engage where appropriate to ensure any changes work effectively for our members and reflect the specific circumstances of charity finance.