The Competition and Markets Authority (CMA) will cut the requirement to have a business current account with a bank to access a business loan or funding from it.
A spokeswoman for the government said that the provisional decision would still be subject to further scrutiny, after consultation with the banking industry.
The final decision is expected in July or August of this year.
"Both the CMA’s initial assessment of the undertakings and the provisional findings of our retail banking market investigation suggest that there remain strong product linkages between business current accounts (BCAs) and lending to small and medium enterprises (SME lending), and that this particularly favours the longer-established banks," wrote the CMA.
Alasdair Smith, chair of the retail banking investigation, said: "For too long, banks have been able to sit back and not work hard enough for their personal and small business customers. We believe the strong and innovative package of measures we are proposing will give customers the information and tools they really need to get a better deal out of the banks. They will also protect those who fall into overdraft from being stung with unexpected fees.
"New entrants into a market are an important source of competition and innovation, and we are well aware of the current barriers to challenger banks in UK retail banking. What’s really holding them back is their ability to highlight to customers how new offerings compare with their current deal. Our package of banking reforms will help new competitors get a stronger foothold in a market which is of vital importance to the whole economy."