For many business owners, “business finance” still means going to the bank and asking for a loan. However, the UK funding market has changed significantly in recent years, giving businesses a much wider range of options to consider.

Understanding what’s available can be particularly useful if you’re making plans for the future, whether that means investing in equipment, taking on more people, pursuing larger contracts or making an acquisition.

According to the latest British Business Bank figures, gross lending to SMEs increased by 9% to £68 billion in 2025, the second-highest level since 2012. But perhaps the more interesting story is where that lending is coming from…

Your high street bank is no longer the whole market

In 2012, challenger and specialist banks accounted for 39% of gross SME bank lending. By 2025, their share had reached 60%, representing around £40 billion of lending, compared with approximately £27 billion from the five largest banks.

Once non-bank lenders are included, 68% of overall SME lending now comes from challenger, specialist or non-bank providers.

So, if your usual bank isn’t able to provide the finance you need, it doesn’t necessarily mean there aren’t other options available.

Different lenders have different criteria and areas of focus, with options ranging from term loans and asset finance to invoice finance and revolving facilities. Finding the right type of finance can therefore be just as important as finding the right lender.

It also makes understanding your business credit profile increasingly important. As more lenders use data and technology to assess applications, your credit score can influence whether finance is available, how much you may be able to borrow and potentially the terms you are offered.

Data from more than 123,000 companies found that 48% had an A-D credit score in January 2026, potentially putting almost half of businesses at a disadvantage when seeking finance, negotiating supplier terms or winning contracts.

Borrowing isn’t necessarily a sign of weakness

There can still be a perception that a successful business shouldn’t need to borrow, but finance used in the right circumstances can be a perfectly normal part of running and growing a business.

Finance can provide the capital to buy equipment, recruit people, fulfil larger contracts, acquire another business or manage working-capital requirements.

The important distinction is between borrowing because cash has unexpectedly run out and using finance as part of a considered plan to achieve a clear commercial objective.

Consider funding as part of your wider plans

If you’re planning to invest or grow, it can be useful to think about how this will be funded before the money is actually needed.

We can help you understand your numbers, your credit position and the different funding options available, so you can consider them alongside your wider plans for the business.

If you’d like to discuss your goals for 2027, and how they could be funded, get in touch by clicking the button below.