Four in five UK business leaders seek external finance this year as they head for growth
UK SMEs are entering 2026 with strong expectations for growth, with 88% of business leaders forecasting revenue increases over the next year, according to new research from Santander Corporate and Commercial Banking.
The study of over 300 UK business leaders found that as they prepare for expansion, more than four in five business leaders plan to seek external finance in 2026, and almost half expect to raise more than £1m.
Findings show 69% feel positive about their business prospects for the next 12 months, rising to 76% among founders, and 54% believe the UK economy will improve over the year ahead. Optimism peaks among younger decision-makers: 65% of business leaders aged between 25 and 44 expect an economic improvement.
Funding is sought for expansion, new product development, hiring and capital investment, as well as managing cash flow and refinancing existing debt.
However, securing finance is not always straightforward. High borrowing costs are the most commonly reported challenge, cited by 41% of leaders, followed by the complexity or length of application processes (30%). Women business leaders are more likely to experience these barriers, with 48% reporting higher costs and 40% saying processes are more complex.
Digital and challenger lenders are also influencing funding decisions, with 41% of leaders applying to a digital or neo-bank last year. While approval rates vary across providers, founders repeatedly highlighted the appeal of speed, user-friendly platforms and more streamlined application processes.
Qualitative interviews also revealed concern that UK funding conditions remain less supportive for high-growth businesses than in the US. Several founders described the US ecosystem as faster, more flexible and better attuned to early-stage and scale-up needs. As one founder put it:
“A lot of founders end up moving to America because it’s easier to raise there and start part of the company there. It’s just quicker.”
Equity ownership also continues to shape funding decisions. Across the audience, 92% say maintaining equity control is important, including 75% who say it is very important. As one founder explained:
“You bootstrap until you’re to a reasonable stage… because you don’t want to give away your company to outside people.”
Guy Phillips, head of Growth Capital, Structured & Specialist Finance at Santander UK, said: “Business leaders are increasingly optimistic about growth this year, with many planning significant investment and expecting strong revenue growth. From the research it is clear, founders want funding that supports their ability to grow without sacrificing control, alongside trusted partners who truly understand the complexities of a business scaling up.
“We are committed to working alongside owners to help bring those plans to life. By providing guidance on growth and expansion, we can help businesses develop a stronger understanding of the different funding trade-offs and risks that are often taken when reaching success.”