More than four in five UK SMEs missed business opportunities last year because they could not access finance, according to new research from lender and broker Lovey.
The firm, formerly known as Love Finance, has published its first SME whitepaper, The 2026 H1 SME Finance Outlook, examining how smaller businesses accessed funding in 2025 and how they are approaching borrowing in 2026.
The report, produced with Atomik Research, surveyed 504 SME owners across the retail, manufacturing, hospitality and construction sectors between December 2025 and January 2026.
It found that 82% of SMEs applied for external finance in 2025, while 81% said they missed business opportunities because funding was not available when needed.
Despite that, 77% said they felt confident about their business performance in 2026, and 71% expected to seek external finance this year.
Lovey said the findings pointed to a market in which businesses remain willing to invest and expand, but are still being constrained by cost pressures and delays in securing funding.
PRESSURES ON GROWTH
The research found that tax burden and rising costs were the two biggest barriers to growth, cited by 25% and 24% of respondents respectively.
Lovey said squeezed margins and cash flow pressures during 2025 meant many firms had to delay or abandon plans when finance was not available quickly enough.
Smaller SMEs appeared to be among the most affected. Among businesses with revenues of between £500,000 and £1 million, 87% said they had missed multiple opportunities because of a lack of finance. That compared with 82% of firms with revenues between £250,000 and £500,000.
The report also suggested businesses are looking for speed and flexibility from lenders. Some 27% said digital loan applications were a priority, while 20% pointed to flexible repayment terms.
There was also broad acceptance of technology in the borrowing process, with 83% saying they were comfortable with AI-supported lending when combined with human expertise.
SECTOR AND REGIONAL SPLIT
Borrowing appetite varied by sector, with hospitality firms the most likely to seek external finance in 2026 at 89%.
That was followed by manufacturing at 71%, retail at 66% and construction at 56%.
The research also highlighted regional differences in the extent to which businesses said they had lost out because of funding constraints.
In the East Midlands, 96% of SMEs said they had missed at least one opportunity due to a lack of finance. The figure was 94% in Wales and 91% in London.
Jack Smith, founder and chief executive of Lovey, says: “SMEs remain the engine of the UK economy, but their ability to grow still depends heavily on how quickly they can access funding.
“After several challenging years, many business owners are starting 2026 with cautious confidence and clear ambitions to expand, whether that’s launching new products, opening additional locations or investing in their teams.
“Our research shows that demand for finance remains strong, yet too many businesses still struggle to access funding quickly enough to seize opportunities when they arise. Improving access to fast, flexible finance will be critical if SMEs are to turn that optimism into real growth in the year ahead.”
Lovey said the findings showed timely and flexible access to finance would remain important for SMEs this year, as businesses continue to manage higher costs, late payments and cash flow pressure while pursuing growth.
