The Intermediary – October 2025 - Flipbook - Page 61
SPECIALIST FINANCE
Opinion
increased by 38%. This shi tells us
two things. First, fewer firms are
approaching lenders because they need
immediate liquidity simply to keep
trading. Second, more are commiing
to longer-term projects that require
stability and forward planning.
In other words, SMEs are not just
borrowing more, they are borrowing
with clearer intentions and a renewed
focus on sustainable growth.
Applications and approvals also
reflect this same trend. Loan requests
rose by 20% in the first quarter of
2025, while overdra demand grew
by 11%. These numbers are more
than just indicators of activity; they
highlight a broader shi in mindset.
Brokers I speak to also report rising
demand for larger transactions, with
two in five expecting greater appetite
for loans above £100,000 this year.
This suggests that, while caution has
not disappeared, many SMEs are now
prepared to take on more substantial
commitments where they can see
long-term value.
Enablers of growth
Set against these developments,
the importance of brokers becomes
paramount. Finance is available,
but the sheer number of options,
combined with criteria that continue
to change, can leave owners uncertain
about the best way to progress.
SMEs need more than a lender; they
need a guide who can assess whether
refinancing is the right route, explain
the degree of flexibility built into a
facility, and identify which lenders
will genuinely support investment-led
borrowing.
Brokers perform this role expertly,
balancing ambition with practicality
and ensuring that deals progress in the
right fashion.
In many cases, their work is the
difference between an application
failing to get off the ground and a
deal completing. This is why I believe
brokers should not be seen as playing a
secondary role in the lending process.
Without their ability to interpret the
market and shape cases in ways that
lenders can support, many businesses
would simply struggle to move ahead.
Delivering real outcomes
The growing role of specialist lenders
makes this point even more evident.
While high street banks continue to
prioritise the most established clients,
specialists are increasingly stepping
in where the opportunities are more
complex or sit outside conventional
criteria. According to recent data,
around 60% of new SME lending now
comes from challenger and specialist
banks, and it is brokers who are
linking businesses to these sources
of funding.
At LHV Bank, I see this
collaboration up close. A £10.9m
facility for a prime office asset near
Birmingham is a good example.
The broker involved in this case had
deep knowledge of the local market,
understood the strength of the
tenancy, and was able to frame the
opportunity in a way that made sense
to us as a lender.
By working together, we provided
the funding that allowed the
acquisition to go ahead and, in doing
so, supported wider regional growth.
The same paern is visible in other
sectors. In healthcare, for instance, we
recently completed a £5m refinancing
package for a portfolio of specialist
care homes. Here, the broker played
a central role in demonstrating the
strength of the underlying assets and
explaining why continued investment
in this sector really maers.
These are not abstract transactions:
they help businesses grow, and at the
same time, support industries with
clear social value.
Rebound to renewal
Looking at these developments as
a whole, the message is clear. The
SME market in 2025 is not simply
rebounding, but moving towards
something more sustainable.
For me, the real story is not only
that lending volumes are rising, but
While caution has
not disappeared, many
SMEs are now prepared to
take on more substantial
commitments where they
can see long-term value”
that borrowing itself is becoming
more purposeful. Businesses are
refinancing with clear strategies,
applying for facilities in greater
numbers, and targeting their finance
at projects that are designed to deliver
future growth.
Brokers are central to this process.
They are the ones who help SMEs
navigate the complexity of the
market, and they are also the ones
who ensure that deals are structured
in ways that both borrowers and
lenders can support.
Just as importantly, they are
connecting firms with specialist
lenders that are willing to back
opportunities that do not fit the
conventional mould.
The outlook is positive. Lending
is rising, businesses are showing
renewed ambition, and the influence
of brokers is more visible than at any
point in recent years.
This year has the potential to mark
a genuine turning point. If SMEs
continue to borrow with focus, and
brokers continue to shape those
deals with precision, 2025 will not be
remembered as a cautious rebound,
but as the year the sector began to set a
new course for growth. ●
October 2025 | The Intermediary
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