// EDITOR’ S QUESTION //

SMES THAT CAN DEMONSTRATE AGILITY AND FINANCIAL RESILIENCE ARE STANDING OUT. ccess to funding is becoming harder for SMEs, not because of a lack of lenders, but due to a fragmented and difficult-to-navigate market. While interest rates are starting to ease, they remain high enough to affect borrowing, especially for those still carrying post-COVID debt. At the same time, rising National Insurance Contributions and the National Minimum Wage are pushing up costs. With consumer spending still subdued, many businesses are missing revenue targets, increasing pressure on margins and covenant compliance. In response, lenders are scrutinising downside risks more closely. SMEs that can demonstrate agility and financial resilience are standing out.

Despite more funders in the market, access hasn’ t become easier. The sheer volume of choice makes it harder. Many lenders are shifting their credit criteria as they become more specialised, meaning matching the right funder to the right business is time-consuming. The original approach of relying on one or two banks is no longer effective.

This makes intermediaries more important. Debt advisors and brokers now play a central role in helping SMEs navigate the funding market. With the right support, businesses can properly structure applications, target suitable lenders and negotiate favourable terms.

Lenders are also becoming more selective. There’ s a clear preference for well-prepared businesses with solid models and strong market positions. These SMEs often attract multiple offers, whilst others may struggle to access support if they fall short. Strong preparation and clarity are now critical.

That said, new lending models are emerging. Some lenders are moving away from historical profits, instead focusing on projected revenues, particularly helpful for SMEs that have reinvested in growth. Others are offering bullet repayments, aligning repayments with future cash flow. These innovations are reshaping the market.

Government-backed schemes are also stepping up. The British Business Bank has launched regional funds, while new financing is being directed at defence and

OWNERS ARE BECOMING MORE REALISTIC ABOUT VALUATIONS AND OPEN TO FLEXIBLE DEAL STRUCTURES.

specialist healthcare. Pension funds are being encouraged to invest in UK SMEs, helping to fill the gap left by traditional banks.

Succession planning is back on the agenda. Owners are becoming more realistic about valuations and open to flexible deal structures. Funders are responding positively, particularly where plans are well thought out.

In today’ s market, SMEs need to be strategic. Funding is available, but access depends on preparation, positioning and finding the right partner. Don’ t go it alone – get advice, tell your story clearly and engage lenders that fit your business.

22 Intelligent SME. tech