Why do mid-sized businesses struggle to find the right finance?
63% of mid-sized UK businesses don’t fit traditional lending criteria. Explore the finance gap and what it means for growth.
Mid-sized UK businesses are struggling to access finance that matches their needs, despite being in a strong position to grow. Shawbrook research shows that 63% do not fit traditional lending criteria, leaving them caught between small business products and corporate-level solutions.
This mid-market gap is limiting growth potential across one of the UK’s most economically important segments.
For a complete breakdown of these trends: Read the full Shawbrook M Agenda Report
What is the mid-market finance gap?
The mid-market finance gap refers to the mismatch between the needs of growing businesses and the financial products available to them.
Shawbrook’s research highlights a structural issue:
- 64% say they are too large for small business finance
- 63% say they do not align with traditional lending criteria
- 65% struggle to find appropriate financial support
These businesses sit in a grey area where standardised lending models no longer apply, but tailored corporate solutions remain out of reach.
Why are mid-sized businesses being overlooked?
Mid-sized businesses are often overlooked because financial products are typically designed for either early-stage SMEs or large corporates.
This creates three key challenges:
- Funding solutions are too generic
- Capital availability does not match growth ambitions
- Lending criteria fail to reflect operational complexity
Among businesses whose funding needs are not being met:
- 32% cannot access sufficient capital
- 32% say available solutions are not tailored
What would businesses do with better access to finance?
Access to the right funding could unlock significant growth activity across the mid-market.
If financial barriers were removed, businesses say they would:
- Expand into new sectors (29%)
- Accelerate existing growth plans (27%)
- Invest in infrastructure and assets (26%)
- Upskill staff (26%)
This highlights how closely access to finance is tied to productivity, innovation, and job creation.
What does this mean for the UK economy?
Mid-sized businesses are often described as the engine room of the UK economy, but this research shows that growth is being constrained by misaligned financial support.
Without better access to flexible funding, specialist lending, and growth-stage financial solutions, there is a risk that high-potential businesses will scale more slowly or inefficiently.
What needs to change?
The data points to a clear opportunity for lenders and policymakers to better support mid-sized businesses.
Key priorities include:
- More tailored financial products aligned to growth stage
- Greater flexibility in lending criteria
- Increased availability of specialist funding solutions
As business needs evolve, financial support must evolve with them.
We often refer to mid-sized businesses as the engine room of the UK economy, and our report highlights the scale of opportunity within this segment. These businesses are growing, investing and looking ahead, but their needs are becoming more complex as they scale. What’s clear is the importance of having access to the right financial support at the right time. As the market continues to evolve, there is a growing opportunity for more tailored, specialist solutions that better reflect the ambition and complexity of these businesses. If we get this right, the impact goes far beyond individual firms, unlocking growth, investment and job creation across the wider economy.
For a deeper analysis of the challenges and opportunities facing mid-sized businesses, including detailed data and sector insights: Read the full Shawbrook M Agenda Report
Methodology
Research was conducted by Censuswide on behalf of Shawbrook between 15–27 October 2025. The survey included 1,000 funding decision-makers at UK mid-sized businesses, defined as organisations with 50–249 employees and annual turnover of £5M–£100M. The sample included 250 property developers.
This research underpins the findings in Shawbrook’s M Agenda Report.
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