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From visibility blind spots to proactive intelligence-driven lending
Small and medium-sized enterprises (SMEs) are the lifeblood of the UK economy, yet they’re locked out of critical funding.
The Bank of England estimates a staggering £22 billion funding gap (although other estimates put this is high as £56 billion) constrains their growth and undermines wider economic resilience.
The invisible barrier to SME funding
This funding shortfall isn’t due to a lack of creditworthy businesses. The gap exists because the lending landscape is not optimised for small or scaling businesses. It’s a landscape hampered by unfriendly application processes, high levels of application rejection, and a lack of visibility into risk and affordability.
Indeed, research by FullCircl partner Codat has highlighted that lenders are handicapped by poor visibility. They lack consolidated, real-time insight into the financial health, working capital of SMEs, as well as their and borrowing across accounts and lenders (both traditional and alternative).
The result is that 39% of SMEs seeking funding are put off by complex, slow and intimidating application processes, that are based on out-of-date information about their business. Likewise, SMEs report that lenders are rejecting their applications based on the fact that they don’t have an adequate track record or insight into their performance, credit status and affordability.
The result?
47% of SMEs struggle accessing external capital, while 55% resort to personal loans to fund their businesses.
Mind the gap: two critical failure points hampering SME funding
Lenders lack the level of insight required to judge performance, risk and affordability correctly. As a result, SMEs suffer the inevitable impact of:
- Manual, sluggish risk models and triage - slowing decisions and driving up risk aversion.
- Fragmented data systems - preventing lenders from understanding comprehensive liquidity or borrowing behaviour.
Changing the narrative with more clarity
Instead of perpetuating the status quo—slow risk models, manual reviews, and siloed data – lenders need to:
- Act proactively, not reactively - engaging SMEs with high value support rather than defaulting to risk adverse rejection.
- Enhance the SME customer experience - turning risk assessments into growth conversations.
- Improve the application process – onboarding SMEs quickly and easily with real time data
Only greater clarity can solve the visibility blind spot.
Introducing ProBanker: The clarity banks need right now to close the SME funding gap for good
ProBanker is already trusted by tier 1 banks and alternative lenders to improve visibility into over £180 billion worth of commercial lending exposure across more than 17 million credit agreements. It delivers:
- Near real-time liquidity insights: from cash flow to payment trends, across multiple banks, thereby creating a cohesive, accurate single version of the truth into SME risk and affordability
- Unified borrowing views: details on outstanding debt and borrowing behaviour, for more confident risk assessment decisioning
- Proactive monitoring and alerts, flagging borrowing spikes or liquidity issues before problems escalate and therefore empowering relationship managers engage proactively
- Significant operational gains, by eliminating time-intensive manual data gathering and structuring financial and credit info for fast, accurate decision-making and smoother application and onboarding processes
The time to act is now
There are over 5.5 million SMEs in the UK, and around 30% of these have sought finance during the last three years, according to The British Business Bank. This equates to approximately 1.7 million businesses. A huge opportunity.
What is more, these SMEs are reporting that their business would grow faster if they could access funding more easily.
If lenders rise to the moment, they will not only close the huge and persistent SME funding gap but also reinforce their role as enablers of SME growth, resilience, and innovation.
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