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<p>The Government is committed to extending the regulatory perimeter only where there
is a clear case for doing so, in order to avoid putting additional costs on lenders
that would ultimately lead to higher costs for businesses.</p><p> </p><p>However,
unincorporated sole traders and small partnerships borrowing less than £25,000 do
receive regulatory protection. In practice, the effect of this is that the smallest
SMEs are more likely than not to receive regulatory protections when borrowing.</p><p>
</p><p>The Financial Conduct Authority estimated in their 2015 Discussion Paper “Our
approach to SMEs as users of financial services” that between 2010 and 2014, 41% of
all the loans and overdrafts applied for by SMEs could potentially fall within the
regulatory perimeter</p>
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