Britain's upstart financial firms are ill-prepared for an economic downturn or a messy Brexit, according to the Bank of England (BOE).

A review of 20 fast-growing businesses by the central bank's Prudential Regulation Authority (PRA) found that the companies, which believe they can continue growing even in declining markets, could struggle to raise funds when the credit cycle turns, according to a BOE letter summarizing the exam.

Melanie Beaman, director in the PRA's supervision unit for U.K. deposit-taking firms, said that while the industry is resilient, many firms—which weren't identified in the public release—need to strengthen their ability to assess threats.

Many “have only existed during relatively benign credit conditions and have not experienced a downturn,” Beaman said. “We do not consider it appropriate to assume that significant growth would be available in generally falling markets.”

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