A study by the British Business Bank revealed that only 43% of small businesses accessed external finance in 2024, down from 50% in 2023. This decline highlights a strong aversion to borrowing among SMEs, driven by high credit costs and a preference for slower, organic growth over taking on debt. At the same time, the alternative lending market in the UK is expanding rapidly. This shift underscores the increasing availability of non-traditional financing options that many businesses may not yet be fully aware of.
The Changing Landscape of Business Finance in 2025
The funding landscape continues to evolve, with a growing number of alternative lenders offering tailored short-term financing solutions. Businesses now have easier access to invoice finance, asset finance, and other flexible funding options, making it simpler to secure capital that meets their specific needs.
Traditionally, many businesses have relied on banks for funding, but the rise of alternative lending has introduced more dynamic financing options. Invoice finance, for example, allows businesses to unlock cash flow from outstanding invoices, while asset finance enables companies to acquire essential equipment without large upfront costs. These alternative solutions provide more flexible repayment terms and faster access to capital compared to traditional bank loans.
Despite these benefits, many businesses still struggle to navigate the complex world of business finance. With so many options available, finding the right funding solution can be overwhelming. That’s why having a strategic approach to sourcing finance is essential.
How to Find the Right Finance Facilities for Your Business
Typically, the search for new funding begins online. A quick search for any finance product will return dozens of lenders, each offering different service levels, pricing structures, and industry expertise. However, this abundance of options can make it difficult to determine which lender is the right fit for your specific needs.
Some business owners also turn to recommendations from associates, family, or friends who have had either positive or negative experiences with particular lenders. While personal recommendations can provide valuable insights, they don’t always guarantee the best match for your business’s unique requirements.
To find the most suitable financing option, businesses should follow a structured approach:
- Identify the type of funding best suited to your needs. Consider whether your business requires short-term working capital, long-term investment funding, or a specialized financing solution like invoice finance or asset finance.
- Determine whether the funding option is available and accessible. Some lenders may have strict eligibility criteria, requiring strong credit scores, high revenue levels, or collateral. Understanding these requirements beforehand can save time and effort.
- Assess which lender offers the most appropriate terms. Look beyond just interest rates—consider repayment terms, flexibility, and the lender’s reputation within your industry.
- Recognize that recommendations may not always be the right choice. Just because a peer or associate had success with a particular lender doesn’t mean their solution is the best fit for your business.
Additionally, businesses should be cautious of hidden fees, rigid contract terms, and lenders with limited industry experience. Working with a finance expert or advisor can help streamline the process and ensure you secure the best deal.
Get Expert Help with Business Funding
If you’re looking for professional assistance in raising finance for your business, visit our Corporate Finance page to learn more about how we can support your funding needs. Our team specialises in helping businesses navigate the complex financial landscape, ensuring you secure the right funding at the right time. With expert guidance, you can access the most suitable financing options and drive your business forward with confidence.
