Mid-sized firms turn to specialist lenders as funding needs become more complex

More than seven in 10 UK medium-sized businesses are considering using specialist or alternative finance providers as part of their funding strategy, according to new research from Shawbrook.

The bank’s latest report, The M Agenda: The Medium-Sized Business Gap, found that 71% of firms with between 50 and 249 employees are looking to work with specialist lenders, reflecting growing demand for more tailored support as businesses scale.

The findings suggest many mid-sized businesses feel underserved by traditional finance providers. Fewer than one in five (19%) believe their current lender truly understands their business, while only 22% say their provider fully understands the market in which they operate.

As funding requirements become more complex, businesses are increasingly prioritising personalised and relationship-led support. The research found that greater personalisation was the most important factor when selecting a finance partner, cited by 29% of respondents, followed by flexibility and faster decision-making, both highlighted by 27%. Dedicated sector expertise was also identified as a key requirement by a quarter (25%) of businesses.

Neil Rudge, Chief Banking Officer at Shawbrook, said the findings demonstrate the growing need for specialist funding support among medium-sized firms.

“The UK lending landscape offers medium-sized businesses more choice than ever before, from sector-specialist lenders and flexible funding structures to relationship-led approaches designed to support growing firms,” he said.

“As businesses grow in scale and complexity, they need partners who offer more than just capital – they need speed, deep sector expertise and hands-on support.”

Rudge added that brokers and finance partners have an important role to play in helping businesses navigate the increasingly diverse funding market and identify solutions that match their stage of growth.