Small businesses are struggling to secure funding for investment and this problem, combined with mounting fears over the Autumn Budget, is putting growth plans for 2026 in jeopardy. How can firms access the finance they need to expand?

Accessing finance is a long-standing challenge for small businesses, but the issue has become increasingly acute recently as market conditions and the state of the lending climate have exposed the seriousness of the situation. According to a new study from Novuna Business Finance, over half of small business owners have revealed that they need to secure funding in order to invest in development plans in 2026.

The sense of anxiety around the ability to target growth, and indeed survival for many, is being heightened by concerns over what the Autumn Budget will hold for small businesses. Further tax rises, including in relation to national insurance, VAT, income tax and fuel duty, is the main fear, with the possibility of such a move posing a direct threat to investment in recruitment, new products and new equipment and facilities.

The research from Novuna is a sign of a worsening situation with regard to small business finance. Earlier in the year, a study from Umazi found that nearly one in three small firms were struggling to obtain funding, while 20% had been turned down for a bank account. In addition, almost a quarter of firms that had sought financial support had had their request rejected or had to deal with significant delays.

In terms of the scale of the small business credit gap, a new report from Bridging & Commercial puts it a staggering £65 billion over the last 25 years. Notably, the report links the issues with small business finance and low investment to poor economic performance.

How alternative finance can help support small firm investment

Clearly, accessing finance is a serious issue for small businesses, both in terms of its impact on their ability to invest, and in relation to managing cash flow, internally and in key supply chains. What can small firms do to improve the situation? This is where alternative finance can help.

Small business lending from traditional sources remains subdued in Q4 2025, with almost 40% of firms finding accessing affordable finance one of their biggest challenges. Against this backdrop, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in the current funding climate.

These alternative finance facilities, which offer a more easily accessible, affordable and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth.

Notably, the Growth Guarantee Scheme is providing a wide range of finance facilities to smaller firms, including asset finance, invoice finance and asset-based lending. This is further proof that alternative lenders are increasing filling the small business funding gap.

Small firm finance options for critical investment in 2026

Small business investment is critical to economic growth, but access to finance is proving a considerable barrier. Concerns around the Autumn Budget are exposing the challenges related to the small firm lending climate. The fear is that without remedy, growth prospects for 2026 could be dashed even before the year has begun.

This is why it is crucial that at small businesses key decision-makers are aware of all the finance options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.