42% of finance brokers expect surging SME demand for loans over £100,000 in next year, as recession fears ease
New research from iwoca reveals big ticket loans are set to see increased interest from small and medium-sized enterprises (SMEs), as growth ambitions resurface.
The Q1 2025 SME Expert Index, a survey of finance brokers conducted quarterly by iwoca — one of Europe’s largest SME lenders –– reveals two in five (42%) brokers think loans above £100,000 will see the most growth in demand in the next twelve months.
Currently, loans over £100,000 comprise over a third (36%) of brokers’ most requested loan amounts in Q1 2025, virtually unchanged in the last two quarters (37%, Q3 2024; 35% Q4 2024), suggesting sustained SME interest in big ticket finance.
iwoca SME Lending Thermometer score
iwoca’s inaugural SME Lending Thermometer, first launched in Q1 2025, provides a pulse check on SME finance appetite across all UK lenders. For Q1 2025, it sits at 5.23, where 1 indicates extremely low demand for finance, and 10 represents extremely high.
The SME Lending Thermometer score is derived from a weighted average of broker descriptions of their SME clients’ demand for finance over the last four weeks –– ranging from ‘very low’, through ‘normal’, to ‘very high’. In Q1 2025, 34% of brokers described SME demand for finance across all lenders as high, compared to 32% who said demand was lower than normal.
Funding growth
The survey suggests the sustained pivot to larger loans has coincided with a fall in recession worries among SMEs. Fewer than half (46%) of brokers now say their SME clients are concerned about the possibility of a recession — a 5pp drop on Q4, and the first fall in downturn anxieties since Q2 2024.
In fact, large loans for cash flow are becoming less common –– just one in four brokers cite it as the most common loan purpose over £100,000, down 8pp since Q4 2024.
Instead, SMEs are requesting large loans to fund growth –– a quarter (26%) of brokers say that firms are applying for loans over £100,000 to expand or move to new premises, up 8pp on Q4 2024. Similarly, seeking finance to fund stock or equipment purchases is up 3pp to 13% in Q1 of this year, indicating smaller firms are increasingly investing in their growth potential.
Alternative lenders dominate
Meanwhile, high street banks continue to lose their grip on SME lending. Over two thirds (67%) of finance brokers now recommend alternative lenders to their small business clients for loan applications over £100,000 –– compared to just 6% who recommend to high street banks.
Three in four (74%) finance brokers report submitting the majority of finance applications to alternative lenders rather than high street banks, up from 67% in Q4 2024, underscoring how high street banks are struggling to meet the needs of today’s growth-focused SMEs.
Colin Goldstein, chief commercial officer at iwoca, said: “The sustained high demand for six-figure loans shows that SMEs are once again betting on their own growth — and they’re turning to alternative lenders to fuel that ambition. It’s a clear signal that SMEs need faster, more flexible capital – and traditional banks aren’t keeping up.”