Britain's five largest banks have pledged £11 billion in lending to small and medium-sized enterprises seeking to expand into international markets, marking one of the banking sector's biggest collective commitments in over a decade.

NatWest, HSBC, Barclays, Lloyds and Santander finalised the agreement at a Westminster roundtable convened by business secretary Peter Kyle and UK Export Finance chief executive Tim Reid. The banks collectively serve half of all British businesses.

The lending will be drawn entirely from the banks' own balance sheets, with UK Export Finance guaranteeing up to 80 per cent of eligible loans. Banks can apply the government guarantee automatically for working capital loans up to £10 million.

"Strengthening Britain's export potential relies on British businesses having the means, motive, and opportunity to succeed in new overseas markets," Kyle said. "The £11 billion these banks are making available will help meet the ambitions of smaller British businesses to fully export, expand and exploit these international market opportunities."

Chancellor Rachel Reeves described the package as providing "firepower" for Britain's small businesses. "We're turning the power of the City into rocket fuel for UK exporters - backing ambitious firms in every part of the country to break into new markets, create good jobs and drive the next decade of British growth," she said.

The announcement comes as Prime Minister Keir Starmer's Labour government seeks to generate growth from Britain's sluggish economy, Reuters reported. However, there is no guarantee the banks will lend the full amount, and firms are likely to ensure any loans meet commercial viability standards.

Businesses will receive advisory support through banks' relationship managers and UK Export Finance's regional export finance managers. Stephanie Betant, head of global trade solutions for HSBC, told the government that 82 per cent of businesses trading overseas expect to grow over the next two years.

Robert Begbie, chief executive of commercial and institutional banking at NatWest Group, said improving access to finance would help businesses "grow with confidence". Matt Hammerstein, chief executive of Barclays UK Corporate Bank, said the partnership would help firms "access the finance, expertise and international networks they need to export, scale and compete at global scale".

The initiative forms part of the government's wider support package for small and medium-sized businesses, which includes legislation targeting late payments and a £4 billion finance boost to increase entrepreneurial access to capital.

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