According to UK Finance, gross lending to SMEs from the main high street banks reached £5.35 billion in the second quarter of 2026, the highest quarterly level recorded since the pandemic.

Real estate and professional services firms drove much of this growth, while manufacturers and hospitality businesses borrowed less.

How can loans help SMEs?

A loan can often be a lifeline for SMEs in a financial rough patch. It can help a business bridge cash flow gaps in the short term, ensuring that it has enough money to cover payroll, rent and supplier obligations.

A loan can also help to fund expansion, support growth opportunities or enable the recruitment of additional staff.

Additionally, loans can help business owners to retain ownership of the company rather than selling equity to investors.

However, SMEs need to remember that a loan must be paid back with interest regardless of business performance.

How should SMEs prepare for a loan?

Preparing your business for a loan requires careful planning and preparation. First, you will need to gather two to three years of financial records, including profit and loss statements, cash flow forecasts and up-to-date tax filings.

Next, you will have to check and correct any errors that may be on your personal or business credit reports in order to optimise your credit profile before borrowing.

You will then have to create a strong business plan outlining your core growth strategy and market opportunity.

There should be a clear breakdown of how the funds will be used, demonstrating how the borrowing will support growth and revenue generation, alongside a risk mitigation section addressing potential economic downturns.

You should carefully assess potential lenders by comparing the criteria, costs and terms offered by high street banks and alternative finance providers.

How can an accountant help?

An accountant can be one of your most valuable assets when applying for finance. They can help to improve your financial record-keeping, build advanced financial models and stress-test your cash flow to give lenders greater confidence in your business.

We understand that securing funding can be challenging for many SMEs, that’s why our team can help you prepare for funding applications and improve your chances of securing the finance you need.

For support with accessing loans, get in touch with our team.