UK SMEs are continuing to face challenges accessing finance, with 81% reporting missed business opportunities in 2025 due to a lack of funding, according to Lovey’s first SME Finance Outlook report.
The research, based on a survey of 504 SME owners conducted with Atomik Research, found that while 82% of businesses applied for external finance during the year, many were still unable to secure funding quickly enough to support growth.
Despite these pressures, 77% of SME owners said they feel confident about their business performance in 2026, with 71% expecting to seek external finance over the next year.
The report identified tax burden at 25% and rising costs at 24% as the main barriers to growth, with financial pressures throughout 2025 limiting expansion plans and forcing businesses to delay or abandon investment.
Smaller SMEs were particularly affected, with 87% of businesses generating between £500k and £1m in revenue reporting missed opportunities due to lack of finance.
Demand for funding remains strong across sectors, with hospitality businesses the most likely to seek finance in 2026 at 89%, followed by manufacturing at 71%, retail at 66% and construction at 56%.
The research also found regional disparities, with 96% of SMEs in the East Midlands reporting missed opportunities, followed by 94% in Wales and 91% in London.
Jack Smith, founder and chief executive at Lovey, said: “SMEs remain the engine of the UK economy, but their ability to grow still depends heavily on how quickly they can access funding. After several challenging years, many business owners are starting 2026 with cautious confidence and clear ambitions to expand, whether that’s launching new products, opening additional locations or investing in their teams.
Our research shows that demand for finance remains strong, yet too many businesses still struggle to access funding quickly enough to seize opportunities when they arise. Improving access to fast, flexible finance will be critical if SMEs are to turn that optimism into real growth in the year ahead.”
The report also highlighted growing acceptance of technology in lending, with 83% of SMEs saying they are comfortable with AI-supported lending when combined with human expertise, alongside a preference for digital loan applications and flexible repayment options.
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