A new report from SME lender Lovey points to ongoing funding challenges for UK small and medium-sized businesses, despite relatively strong confidence levels heading into 2026.<\/p>\n
The study, based on a survey of more than 500 SME owners, found that while many businesses are planning to grow, access to finance remains a key constraint. Profits and cash flow pressures linked to rising costs and taxation have limited the ability of firms to invest and expand.<\/p>\n
According to the findings, 82% of SMEs sought external finance in 2025, yet 81% reported missing business opportunities due to a lack of available funding. Demand is expected to remain high, with 71% of respondents planning to seek finance this year.<\/p>\n
Cost pressures continue to weigh on the sector, with tax burden and rising operating costs cited as the most significant barriers to growth. Smaller businesses appear particularly exposed, with a higher proportion reporting missed opportunities linked to funding shortfalls.<\/p>\n
The report also highlights differences across sectors and regions. Hospitality firms are the most likely to seek funding in 2026, while areas including the East Midlands recorded some of the highest levels of missed opportunities due to lack of finance.<\/p>\n
At the same time, businesses are increasingly open to changes in how finance is delivered, with a growing preference for digital applications, flexible repayment terms and AI-supported lending alongside human oversight.<\/p>\n
Jack Smith, Founder and CEO of Lovey said: \u201cSMEs remain the engine of the UK economy, but their ability to grow still depends heavily on how quickly they can access funding. After several challenging years, many business owners are starting 2026 with cautious confidence and clear ambitions to expand, whether that\u2019s launching new products, opening additional locations or investing in their teams.<\/p>\n
“Our research shows that demand for finance remains strong, yet too many businesses still struggle to access funding quickly enough to seize opportunities when they arise. Improving access to fast, flexible finance will be critical if SMEs are to turn that optimism into real growth in the year ahead.\u201d<\/p>\n
The findings suggest that while sentiment among SMEs remains relatively positive, access to timely and flexible funding will continue to play a central role in determining growth across the sector in the year ahead.<\/p>\n","protected":false},"excerpt":{"rendered":"
New research highlights continued pressure from rising costs and tax, with strong demand for external finance in 2026<\/p>\n","protected":false},"author":266702,"featured_media":2109615,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"coauthors":[127717],"class_list":["post-2109614","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","tag-black-country","tag-coventry-and-warwickshire","tag-featured-story","tag-greater-birmingham","tag-shropshire","tag-staffordshire","tag-worcestershire"],"yoast_head":"\n