Allica Bank’s latest broker survey found nearly half (48.5%) of brokers saw more commercial mortgage applications over the past six months, up from 40% in Q4 2024.
Just over 20% said applications fell, while 31% reported no change.
Where applications dropped, 45% blamed rising costs, with another key reason being caution around interest rate movements.
Refinancing and investment purchases remained the main reasons businesses were borrowing, and 45% of brokers said more firms were looking to buy their own premises.
In bridging finance, 45% of brokers reported an increase in investment deals, 44% in refurbishment, and 37% in development.
Looking ahead, brokers were more positive about the next six months compared to Q4, where 51% were worried about growth into 2025.
Charissa Chang, head of broker sales, North and Midlands at Allica Bank, said: “After a tough period, this is a sign that SME confidence is starting to return.
“Businesses are making decisions again, and we’re seeing more clients looking to secure their premises and invest in their long-term future, which is exactly where the market needs to be heading.”
“It’s also a clear sign of resilience. Allica’s recent SME Lending Gap report revealed that the UK has some of the lowest rates of business investment in the G7 – but SMEs are still planning, still borrowing, and still investing, and that says a lot about their mindset, and the role brokers play in helping them move forward.”
Chang added: “Overall, the findings suggest a more positive outlook than what might be expected, and while challenges remain, the direction of travel is encouraging.
“Businesses are taking proactive steps, and brokers are at the centre of that momentum, which Allica will continue to support through our ongoing investment in technology and the relationship-led business banking that brokers and their clients still value.”
Brian Love, commercial finance director at Sedulo Funding, said: “We’ve definitely noticed a shift over the past few months as clients who were sitting tight are starting to re-engage, and while there’s still a level of caution, there’s also a stronger sense of wanting to plan ahead.
“What makes the difference now is working with lenders who can move at pace, but also take the time to understand each deal individually.
“Working with banks like Allica, who recognise that, is a breath of fresh air and vital to the success of our clients.”
