Access to finance is becoming more difficult
The proportion of SMEs finding it very difficult to access finance has more than tripled since Q1, rising from 7% to 23%. At the same time, the number describing access as very easy has almost halved. The findings suggest that many businesses are encountering tighter lending conditions just as they look to invest and grow.
This is particularly striking because confidence is improving elsewhere. More businesses expect revenues to increase over the coming months and confidence in both the economy and their own businesses has strengthened since the first quarter. However, greater optimism does not necessarily make it easier to secure finance. For many SMEs, accessing funding remains one of the biggest barriers to turning plans into reality.
A shift towards alternative lenders
The report indicates SMEs are broadening their search for funding, with alternative finance becoming a more attractive option than loans from traditional banks. Overdrafts have overtaken credit cards as the most common source of finance, while business owners are increasingly willing to consider lenders beyond the high street, including invoice financing and asset-based lending. This suggests growing awareness of the wider range of finance options available and a greater willingness to choose products that better suit their business needs.
Sources of finance most likely to be used in 2026
Source: Capify SME Business Confidence Report — Q2 2026
This does not suggest businesses are abandoning banks altogether. Rather, they are recognising that different funding providers can meet different needs. When speed, flexibility or certainty are priorities, many SMEs now explore a wider range of options.
Why funding matters more than ever
The latest Business Confidence Report paints a picture of businesses that remain ambitious despite continued economic uncertainty. Around half expect revenues to increase over the next six months, while many continue to invest in equipment, marketing and technology.
Access to finance plays an important role in enabling growth, especially when cash flow is tight. Whether investing in new equipment, recruiting staff or strengthening working capital, the ability to secure funding quickly can help businesses act on opportunities rather than delay them.
As the funding landscape evolves, businesses should think beyond simply securing a loan. The right finance partner should understand the pressures facing SMEs and offer funding that matches the way businesses operate.
Read the latest findings
The Capify SME Business Confidence Report – Q2 2026 explores how UK SMEs are responding to rising costs, changing market conditions and evolving funding needs.
Download the report to explore the full findings, or check your eligibility to see how flexible business finance could support your next stage of growth.
