Britain’s newest banks and its newest chancellor have something in common: They are honing in on the country’s youngest businesses in a bet on growth.

Chancellor of the Exchequer John Healey this week unveiled measures intended to increase growth by funding startups and small businesses. That’s the same customer base digital banks including Revolut Ltd. and Monzo Bank Ltd. see as a lucrative opportunity.

The goal is to collect more in deposits, by offering a variety of business services. They also increasingly have their sights set on lending. Revolut is planning to roll out credit products for businesses next year, according to the head of Revolut Business, James Gibson.

Over half of small businesses don’t rely on any external financing, according to a recent Financial Conduct Authority report. Many small-business borrowers finance themselves using credit cards or overdrafts, the UK Department for Business & Trade said in January, neither of which are generally intended as long-term business financing.

Attracting more businesses would also grow balance sheets of Britain’s fintechs, which generate more income from businesses than they do individuals. Monzo, for example, makes £484 ($645) on average per active business customer, compared with £167 on average active personal customers.

“There was a wave of disrupting consumer banking,” said Megha Kansal, a senior partner at McKinsey who co-runs its payment practice. “Now there’s a wave of the same players starting to disrupt business.”

Challenger and specialist banks have already won market share, providing 60% of gross lending to small- and medium-sized businesses last year, according to the government-backed British Business Bank. “It’s part technology, part regulation and part different business models to reach SME customers,” said Matt Adey, a managing director at British Business Bank.

The lender is set to receive a £5 billion uplift from Healey’s budget, intended to increase access to finance for innovative startups. There’s competition from Britain’s biggest banks — Barclays Plc, HSBC Holdings Plc, NatWest Group Plc and Lloyds Banking Group Plc — which have been criticized for not lending to or banking enough small businesses, and have announced efforts to boost such availability.

They’re also reworking their technology to help onboard businesses and individuals. Lloyds this year dedicated £9.5 billion of new finance to small businesses, and has said it’s prioritizing expanding its team covering small enterprises and mid-market businesses. HSBC pledged last year to make an additional £5 billion of lending available to such firms over the next five years.

Its SME business banking arm is investing most into its digital platform, according to the unit’s head, Tom Wood. High-street lenders contrast themselves with digital competitors by emphasizing their physical branches that can make them more accessible to businesses.

That said, operating branches across the UK have been on the decline over the past decade, falling over 59% from 2015 to 2025. Revolut won over Richard Grant, who runs an IT recruitment firm in Colchester, England, with 10 staffers and £2 million in annual revenue, by offering quick and cheap currency transfers.

But Grant said earlier this year he was locked out of his account for several days and wasn’t offered a detailed explanation. The issue was resolved but the experience — leaving him unable to pay his contractors on time — prompted him to consider other banks. He said he couldn’t find one with the same flexibility and currency capabilities.

“Account reviews are mandatory and necessary to protect our customers and the integrity of the financial system,” a Revolut spokesperson said in a statement. “As part of our regulatory obligations, we may apply restrictions to customer accounts for a variety of reasons and we can’t always disclose why a customer’s account has been restricted.”Fintechs are focusing on making their products stickier, adding accounting, tax tools and payroll integration. Starling Bank is working on a business credit card, according to Sami Kade, banking product director at the firm.

“Increasingly, if you talk to any business owner, they don’t care about what is banking versus not banking versus financial services,” said Jordan Shwide, general manager of Monzo Business, which is expanding with the bank’s UK consumer offering and into Spain and Ireland.

Commercial banking “is increasingly won through transactions, not lending,” McKinsey said in a report in September.

Wise Group Plc reported a 26% uptick in the number of active business customers in the three months ended Sept. 30, moving more than $22 billion across borders for them. According to Steve Naudé, who runs the company’s payments infrastructure unit for global enterprises, small firms go global much earlier in their lifespans than they did before, which presents an opportunity.

For Revolut, business growth has come from attracting firms with foreign exchange, multicurrency accounts and cards with spend management, according to Gibson. “You can lead with transactions,” Gibson said.