Challenger bank lending to SMEs hits record high Data from the Government-backed British Business Bank shows that lending to small firms by challenger and specialist banks hit a record high in 2022. The report shows that smaller banks lent £35.5bn to SMEs last year, giving challenger and specialist banks a 55% share of the market. This exceeds the 51% market share smaller lenders achieved in 2021. While the sector’s biggest banks - Barclays, Lloyds, HSBC, NatWest and Santander – have traditionally dominated smaller business lending, challengers such as TSB and Metro Bank and specialists like Shawbrook Bank and Paragon Bank have taken a growing share of business customers. Gross bank lending to smaller businesses reached £65.1bn in 2022, up from the £57.7bn seen in 2021.