Brokers urge funders to think ‘outside the box’

Commercial finance brokers are renewing calls for funders to adopt a more flexible, open-minded approach to lending, warning that many of their long-standing demands remain largely unmet despite rising demand for finance among UK SMEs.

New survey data from SME funding provider Asset Advantage shows that brokers are increasingly frustrated with rigid lending criteria and limited credit appetite from mainstream funders. An “outside-the-box” approach to deals is now the top priority for 68% of brokers surveyed – double the level recorded in late 2024, when just 34% cited it as their main demand.

A higher appetite for credit has also surged up brokers’ wish lists, jumping from 13% in the previous survey to 55% this time around. Nearly half (49%) of brokers said they want greater flexibility on loan terms, up from 23% in late 2024, while more than a quarter are calling for greater transparency in lending criteria, rising from 16%. Brokers have also added improved processes to their demands, with a third now highlighting the need for smoother, faster and less bureaucratic funding journeys.

Despite the growing urgency of these calls, brokers say progress from funders has been limited. The findings come as brokers report increasing demand for commercial finance from UK SMEs, with asset finance and business acquisitions expected to dominate funding needs this year. Many say current funding models struggle to accommodate more complex transactions, non-standard assets or businesses operating in niche sectors.

“Given the demand we are seeing from SMEs for funding, there’s clearly a need to give brokers the tools and support they require to answer it,” he said. “We know from speaking to brokers that there is definitely an appetite issue from mainstream funders – both in terms of risk and funding more complex deals, business acquisitions and supporting non-standard assets or sectors. In truth, more boutique, specialist funders continue to gain ground by answering such demands.”

He added that brokers are increasingly being forced to look beyond traditional lenders to get deals done. “Now more than ever, a flexible and pragmatic approach is required to give good businesses the time of day and brokers the support to get more of their transactions approved and over the line. Boutique funders continue to prove that partners can be approachable and commercially-minded, while still being open-minded and pragmatic too.”

With SMEs seeking funding to invest, acquire and grow in a challenging economic environment, brokers say the message to funders is clear: adapt lending models to real-world business needs – or risk being left behind by more agile competitors.