According to UK Finance, gross lending to SMEs from the main high street banks reached £5.35 billion in the second quarter of 2026, the highest quarterly level recorded since the pandemic.
Real estate and professional service firms drove much of this growth, while manufacturers and hospitality businesses borrowed less.
How can loans help SMEs?
A loan can often be a lifeline for SMEs in a financial rough patch. It can help a business bridge cash flow gaps in the short term, ensuring that it has enough money to cover payroll, rent and supplier obligations.
It could also be the case that a loan can help to fund expansion to increase business opportunities or hire more staff.
Additionally, loans can help business owners to retain ownership of the company rather than selling equity to investors.
However, SMEs need to remember that a loan must be paid back with interest regardless of business performance.
How should SMEs prepare for a loan?
Preparing your business for a loan can often be a tricky process. First, you will need to gather two to three years of profit and loss statements alongside cash flow forecasts and up-to-date tax filings.
Next, you will have to check and correct any errors that may be on your personal or business credit reports in order to optimise your credit profile before borrowing.
You will then have to create a strong business plan outlining your core growth strategy and market opportunity.
There should be a clear breakdown of how the funds will be used, linking every borrowed pound to revenue generation, as well as a risk mitigation section addressing potential economic downturns.
You must consider the lender that you are selecting by comparing criteria across high street banks and alternative providers.
How can an accountant help?
An accountant can be one of your most valuable assets when applying for finance. They can help to improve your financial record-keeping, build advanced financial models and stress-test your cash flow to give lenders greater confidence in your business.
We understand that it is tough for SMEs to obtain funding at the moment. That is why our team can help you obtain the loan that you need.
For support with accessing loans, get in touch with our team.
