Chancellor John Healey has said that British business is turning a corner, and while Capify research shows signs of optimism, it also highlights the struggle for businesses to secure finance.
Speaking at the Manufacturing Technology Centre (MTC) in Coventry, Healey spoke of a country “where businesses are ready to seize the opportunity of new technologies and new ideas”.
He highlighted reductions in interest rates, noting that government borrowing was at a six-year-low, and that growth was the “the fastest in the G7 in the first half of this year”.
The Chancellor was also upbeat about productivity, saying it was “finally ticking up after decades of lagging behind our peers”.
Tough realities for UK SMEs
The upbeat speech reflects some of the findings of the recent Capify Business Confidence Report, which recorded SMEs’ confidence in the UK economy rising from 13% to 22% between Q1 and Q2 2026.
However, that optimism needs to be balanced by further data from the report that shows 78% of surveyed small business owners were unconfident or undecided about the UK’s economic outlook.
Speaking at the launch of the report, John Rozenbroek, COO at Capify said: “While confidence is beginning to recover for some, many more struggle to protect margins, manage cash flow and secure finance.”
Access to finance is holding SMEs back
The Capify report also found that smaller UK businesses are finding it increasingly tough to access finance. More than a third say it is difficult, with those describing it as very difficult jumping from 7% to 23% in the last quarter.
This shows a clear shift in the funding experience for SMEs; in Q1, a significant minority found finance hard to access. By Q2, those business owners were in the majority. The data also shows that smaller businesses are increasingly open-minded about where to seek funding. SMEs are now more likely to look to alternative finance providers rather than traditional banks to secure a loan.
Five ways the Chancellor can help boost growth for SMEs
Hundreds of SMEs contributed to the latest Capify Business Confidence Report. These businesses have confidence in themselves, but say that external factors are holding them back.
The report suggested five ways the Government could support SME growth:
1. Reduce employment cost and complexity
Employment taxes and legislation are impacting 85% of SMEs, creating a significant barrier to growth. Addressing the impact of these costs on SMEs – and creating a more predictable regulatory environment – would give SMEs greater confidence to create jobs, invest in skills and expand their workforce.
2. Strengthen late payment regulation
Late payments continue to restrict cash flow for 70% of smaller businesses, delaying investment and increasing financial pressure. Improving payment practices would strengthen the SME sector without major public spending, helping businesses focus on growth rather than chasing overdue invoices.
3. Improve skills and training support
Skills shortages continue to limit growth for many SMEs, with one in four businesses identifying this as their biggest staffing challenge. Improvements in skills-based education and training would help businesses access the talent they need while improving productivity across the economy.
4. Support the use of AI
Six in ten SMEs can’t see a clear business case for AI, with a lack of time, expertise and investment slowing adoption. Practical guidance and skills support would help businesses identify where AI can improve productivity, reduce costs and support sustainable growth.
5. Increase economic stability
Businesses can adapt to challenging conditions, but uncertainty makes long-term planning difficult for the 78% that lack confidence in the economic outlook. The Q2 2026 Capify Business Confidence Report suggests SMEs are ready to invest, recruit and grow, but greater confidence in the economic outlook would encourage more businesses to turn cautious optimism into action.
Learn more about the attitudes and expectations of UK small and mid-sized business in the Capify Business Confidence Report: updated every quarter.
Need finance to fund growth or manage cashflow? Use our quick eligibility checker.
