Broker-led SME lending in the UK hit a record £33 billion in 2025, a 25% year-on-year increase, according to the National Association of Commercial Finance Brokers (NACFB). NACFB members alone arranged 180,000 loans for UK businesses, generating an estimated £12 billion in direct Gross Value Added.
NACFB analysis places the total UK broker-facilitated SME lending market at approximately £50 billion annually, with NACFB members accounting for nearly two-thirds of it. When wider economic effects are included, the total impact of broker-led lending rises to £19.2 billion, supporting an estimated 185,000 additional jobs.
Where the growth is coming from
The surge in broker-led lending reflects a structural shift in UK SME finance. British Business Bank data shows that challenger banks accounted for 60% of SME lending in 2025, unchanged from the previous year — the second time in over a decade that their market share has not increased. Traditional high-street banks (Lloyds, NatWest, Barclays, HSBC, Santander), which held 61% of lending in 2012, now take a materially smaller share.
Challenger banks such as Starling, Allica Bank and Oxbury, plus non-bank lenders led by Funding Circle, now account for 68% of total SME lending. Funding Circle remains the largest non-bank lender, with a "low-to-mid 50%" share of business loans by volume among its peer group.
Why SMEs are turning to brokers
Loan approval rates at high-street banks have improved modestly to 53% in 2025, up from 49% in 2024 — but still well below the pre-pandemic level of 74% in 2019. Against that backdrop, 62% of broker-facilitated lending was delivered outside London and the South East, underlining the intermediary channel's role in regional economic growth.
| UK SME Lending Market (2025) | Figure |
|---|---|
| Total broker-facilitated SME lending | ~£50 billion |
| NACFB member-arranged lending | £33 billion |
| Loans arranged by NACFB members | 180,000 |
| Challenger bank share of SME lending | 60% |
| Non-bank + challenger combined share | 68% |
| Bank SME loan approval rate | 53% |
What the NACFB says
Tim Higginbotham, CEO of the NACFB, described brokers as "a structural component of how funding flows to small businesses", noting that as market complexity increases, the value of informed professional guidance rises with it.
The outlook for 2026
The EY ITEM Club Bank Lending Forecast expects bank-to-business lending to slow from 6.9% net growth in 2025 to around 3.5% in 2026, as global and domestic headwinds weigh on business confidence. High-street banks are responding — Lloyds has announced plans to make £9.5 billion available to SMEs this year, and a consortium of major banks has committed £11 billion to support SME exporters.
For UK business finance brokers, the message is clear: demand is deepening, alternative lender panels are widening, and the broker channel continues to outperform direct bank origination.
Disclaimer
This article is for general information only and does not constitute financial advice. Business lending products are subject to lender status and eligibility criteria. SMEs should seek independent advice and compare options from FCA-regulated or appropriately authorised lenders and brokers before committing.
FAQ
What is the NACFB?
The National Association of Commercial Finance Brokers — the UK trade body for commercial finance intermediaries.
Are business finance brokers FCA-regulated?
FCA regulation applies to lending to sole traders, small partnerships and "relevant recipients of credit" where the loan is £25,000 or less. Lending to limited companies and larger amounts typically falls outside the FCA's consumer credit remit.
How do brokers earn money?
Most commercial finance brokers receive a commission from the lender, though some also charge client fees. Fee disclosure is required under industry standards.
