Mid-sized firms ‘overlooked’ by lenders, Shawbrook warns

Shawbrook has highlighted a growing funding gap for the UK’s medium-sized businesses, with new research revealing that many are struggling to find finance solutions that match their needs.

In its latest report, The M Agenda: The Medium-Sized Business Gap, the bank found that 63% of mid-sized firms do not align with traditional lending criteria, leaving them caught between products designed for small businesses and those aimed at large corporates.

The findings underline a widening disconnect between lenders and what Shawbrook describes as the UK economy’s “engine room” – a segment that is often well-positioned for growth but underserved by mainstream finance options.

According to the report, nearly two-thirds (64%) of medium-sized businesses believe they are in a stronger position than smaller firms, yet still struggle to secure suitable funding. A similar proportion say they are effectively “too big” for small business finance but “too small” to access corporate-level solutions.

This mismatch is creating real barriers to growth. Around 65% of respondents said they find it difficult to source appropriate financial support, while 64% feel overlooked by lenders despite their expansion potential.

Among those whose funding needs are not being met, 32% said they cannot access sufficient capital, and 32% said available products are too generic and not tailored.

Despite these challenges, the report suggests mid-sized businesses remain ambitious and ready to invest if the right support is available.

If better funding solutions were accessible:

29% would expand into new sectors
27% would accelerate existing growth plans
26% would invest in infrastructure and assets
26% would upskill their workforce

Neil Rudge, Chief Banking Officer at Shawbrook, said the findings highlight both a challenge and a significant opportunity for the lending market.

“We often refer to mid-sized businesses as the engine room of the UK economy, and our report highlights the scale of opportunity within this segment,” he said.

“These businesses are growing, investing and looking ahead, but their needs are becoming more complex as they scale. What’s clear is the importance of having access to the right financial support at the right time.”

Rudge added that the evolving needs of mid-sized firms present an opportunity for lenders to develop more tailored, specialist solutions.

“If we get this right, the impact goes far beyond individual firms, unlocking growth, investment and job creation across the wider economy,” he said.