Four in ten SMEs say affordable finance is biggest challenge

Access to affordable finance has emerged as the single biggest challenge facing small and medium-sized enterprises (SMEs), according to new research from Millbrook Business Finance.

In a survey of more than 100 SMEs, 35% of respondents said securing affordable borrowing was their top concern, putting the issue ahead of rising operational costs (14%), economic uncertainty (14%), late payments (13%), high taxes (11%), staff recruitment and retention (7%), and government regulation (6%).

When asked which area would provide the greatest benefit to their business right now, the priorities shifted slightly, but finance still dominated. Almost four in ten SMEs (38%) said easier access to finance would help them most, followed by lower operational costs (29%), faster payments from clients (16%), more skilled staff (11%), and clearer regulatory guidance (6%).

“These figures speak plainly. Finance is the top concern,” Amos said. “SMEs want support in two areas: keeping cash flowing in through faster payments and securing affordable borrowing. Costs come next. Add economic uncertainty to that, and it’s no surprise firms are cautious about investment, hiring and planning.”

Amos called for coordinated action from finance providers, business leaders, and policymakers to address the pressure points facing SMEs.

• Finance providers, he said, should simplify loan terms, speed up approvals, and offer fairer rates.
• Business leaders should improve invoicing discipline, chase payments on time, and consider incentives for early settlement.
• Policymakers should provide stability through regulation, targeted tax relief, and practical measures to ease rising costs such as energy and rent.

“Labour shortages and tax pressures matter, but they are not as urgent as funding, cost and cash flow,” Amos added. “SMEs are asking for practical, workable measures and not promises.”