SMEs prioritise funding that eases payment anxiety

Small and medium-sized enterprises (SMEs) across the UK are increasingly prioritising funding solutions that reduce financial pressure and payment anxiety, according to new research from revenue-based finance specialist 365 Finance.

The lender’s latest customer survey reveals that business owners are choosing revenue-based finance because it acts as a risk-sharing funding option, with repayments linked directly to sales performance. This model means that when revenues dip, repayments fall too – providing greater flexibility in cash flow management and peace of mind for entrepreneurs navigating uncertain trading conditions.

Revenue-based finance is growing in popularity among SMEs seeking to fund business growth without the stress associated with fixed monthly repayments. By aligning repayments with revenue, the funding model offers businesses a more adaptable way to access capital while protecting day-to-day cash flow during quieter trading periods.

Findings from 365 Finance’s Q1 2026 customer survey show that the primary reasons SMEs apply for revenue-based funding are to support cash flow, purchase stock or inventory, and fund renovations or business improvements. Emergency and unexpected repairs ranked as the fourth most common reason for seeking finance, followed by the purchase of equipment and machinery. Respondents also cited the need to cover urgent bills as a motivating factor for applying for funding.

When considering finance options, SMEs said the most important factors influencing their decisions are the total cost of funding, the amount available to borrow, the speed of accessing funds, the ease of the application process, the flexibility of repayments, and the quality of ongoing customer service.

Warren Abbey, CEO at 365 Finance, said: “As a highly ethical lender, we take pride in our strong customer relations and responsible underwriting processes, assisting businesses with their long-term plans for stability and growth. We continually ensure that SMEs get the financial support they need, but more importantly the right funding to help them flourish.

“The pain point for SMEs often isn’t the cost of finance, but their payment anxiety – which is usually the main factor contributing to when they reject funding. Revenue-based finance offers a solution to payment anxiety due to how payments are taken, never overstretching the SME.”