ThinCats’ latest adviser survey shows only 6% of advisers think that government policy supports UK SMEs
New data published today by leading non-bank lender ThinCats, shows that a majority (52%) of corporate finance advisers feel that the current government’s policy does not support mid-sized SME growth, with only 6% expressing confidence in the government’s approach. Respondents pointed to the impact of measures such as National Insurance tax increases and employment reforms as key barriers to growth.
However, despite ongoing political and macroeconomic challenges, corporate finance advisers have a cautiously optimistic outlook for the second half of 2025.
While the research shows 38% of advisers reported a decline in deal activity in the first few months of 2025, with a further 27% saying the market was flat, almost half (48%) say there is increasing demand for funding from owner-managed businesses, underscoring the resilience of this vital part of the UK economy.
Deal activity slows, but funding remains available
Advisers highlighted macroeconomic uncertainty and deal quality as the primary constraints on activity, with 34% reporting a reduction in their own deal pipelines. Interestingly, concerns around interest rates have diminished, and funding availability remains stable.
Confidence in the UK’s economic outlook is also improving, with 35% expressing cautious optimism, up from the previous survey which followed the Autumn Statement, compared to 23% who were somewhat pessimistic. Market stability, funding availability, and pent-up demand are seen as key drivers of this sentiment.
Despite the challenging funding market, the most recent Experian M&A tracker showed ThinCats is still supporting the highest volume of deals ranking as the number one lender across the UK.
Ravi Anand, managing director, ThinCats:“It has been a challenging few months in the lending market. But to see the majority of advisers report that they believe the current governments approach to be actively damaging to UK SMEs is troubling to see. Following the Autumn Statement, many businesses have basically paused on any growth or acquisitions. Wider geopolitical issues are raising concerns about government debt and expectations of rate decreases by the Bank of England. Despite these challenges, the good news is that businesses in the mid-market are resilient and advisers are picking up on positive sentiment. Hopefully, we will see more activity into the rest of 2025.”