Demand for SME finance increased during the second quarter, although a growing proportion of commercial brokers are reporting difficulties securing funding for clients, according to research from Atom bank.
The lender’s latest SME Pulse found that 38% of brokers had experienced an increase in demand from SME clients during Q2 2026, compared with 33% in the first quarter.
At the same time, the proportion reporting a decline in demand fell from 12% to 4%.
Improved business confidence was cited by 67% of respondents as a factor behind the increase, while 44% pointed to a wider choice of products and 28% to lender appetite.
FUNDING ACCESS UNDER PRESSURE
Despite the improvement in demand, 25% of brokers said they were finding it difficult to secure finance for clients. This was up from 19% in the previous survey and 11% in Q4 2025.
Brokers identified rising interest rates, tighter lender criteria and lenders favouring higher-value corporate clients among the factors affecting access to finance.
Looking ahead, interest rate movements were regarded as the factor most likely to influence SME demand over the next 12 months, cited by 28% of respondents. Economic growth and customer demand were selected by 21%, followed by inflation and business costs at 19% and government policy at 17%.
BROKERS ASSESS CHANGE OF PRIME MINISTER
The survey also asked brokers about the potential effect of Andy Burnham becoming Prime Minister. A quarter expected businesses to become somewhat less inclined to seek external funding, while 17% anticipated an increase in demand.
Most respondents expected little change, with 57% predicting the change in Prime Minister would have no effect on SME borrowing appetite. Atom bank said 79% of brokers had seen no change in demand since Burnham entered Downing Street.
Chris Storey, chief commercial officer at Atom bank, says: “We are still in the early days of the Andy Burnham government, so it’s perhaps unsurprising that there has been little immediate impact on SME demand.
“However, it’s notable that brokers are cautious about the months ahead, and what the change in Prime Minister means for borrower appetite. All eyes will be on next month’s Budget, and what impact it may have on the nation’s small businesses.
“While accessibility is good on the whole, it is somewhat of a concern that the proportion of brokers reporting problems in securing funds for their clients has increased for two straight editions of our study.
“Lenders should work closely with brokers to establish which types of business are having the most difficulty in securing funds, and where support can be improved. It’s something we have done consistently at Atom bank.
“In recent months we have lowered our minimum loan size to £100,000 and introduced a Natural Capital proposition, among other ongoing improvements to our journey to make things faster and easier.
“If we are serious as an industry about supporting businesses, then we need to understand what they need from funders, and act on that feedback.”
