Every January we all try to predict what the year ahead will look like. Some years it’s easier than others.
If I’m honest, I started 2026 expecting a fairly cautious lending market. Higher borrowing costs over the last couple of years had understandably made businesses think carefully before taking on new finance, and I thought lenders would remain equally measured.
Six months in, I’ve been pleasantly surprised.
What I’ve seen is a market that’s becoming increasingly competitive. There’s plenty of appetite from alternative and specialist lenders to support good businesses, but at the same time business owners are taking a much more considered approach to borrowing. They’re asking better questions, exploring more options and making decisions with the long term in mind.
From where I sit, that’s no bad thing.
Three things that have stood out to me
One of the biggest changes I’ve noticed is the level of competition across the market.
Banks, challenger banks and specialist funders all seem keen to write good business, which means borrowers have more choice than they’ve had for some time.
That doesn’t mean money is being handed out freely. Strong financials, a clear purpose for the funding and a well-presented proposal still make all the difference. When those pieces are in place, there are some excellent opportunities available.
When people talk about business finance, it’s easy to focus on expansion.
In reality, many of the conversations our brokers have been having this year have been around helping businesses put themselves in a stronger position.
Whether that’s refinancing existing facilities, improving cash flow or simplifying borrowing arrangements, many business owners have taken the opportunity to strengthen their foundations before making their next move.
Sometimes the smartest growth strategy is making sure the business is financially fit for whatever comes next.
The days of an SME simply approaching their business bank and hoping for the best are disappearing and awareness of alternatives is at an all-time high.
There are now so many specialist funding solutions available that every situation deserves a fresh conversation. Whether it’s invoice finance, commercial mortgages, bridging finance or specialist lending, businesses have far more options than they did a few years ago.
That’s where our broker can really add value. It’s no longer just about finding finance, it’s about finding the right finance for your circumstances.
What surprised me most?
Probably the difference in confidence between lenders and borrowers.
Lenders, generally speaking, seem much more optimistic than they did this time last year. They’re keen to support good businesses and are actively looking for opportunities.
Business owners, however, are still understandably cautious.
Many are focusing on protecting margins, managing costs and building resilience before committing to major investment. Given everything businesses have experienced over the past few years, that’s entirely understandable.
Looking ahead
As we move into the second half of the year, I expect confidence to continue building.
Businesses that have spent the last couple of years strengthening their finances may now feel ready to invest again, whether that’s purchasing equipment, expanding premises, recruiting new people or making acquisitions.
I also expect specialist lenders to continue playing an increasingly important role. They bring flexibility, speed and a willingness to look at opportunities that don’t always fit traditional banking criteria, and that’s proving invaluable for many businesses.
Of course, challenges remain. Rising costs haven’t disappeared, some sectors are still facing recruitment pressures, and the wider economic picture continues to evolve, but I remain optimistic.
There is capital available. There are lenders looking to support good businesses. The key is making sure you’re approaching the market with a clear plan and exploring all of the options available to you.
