Demand for external funding among small and medium-sized businesses increased in the second quarter, but brokers have reported growing difficulties securing finance for clients, Atom bank has found.

According to the bank’s latest SME Pulse, some 38% of commercial brokers said demand from SME clients had increased in Q2 2026, up from 33% in the first quarter, while the proportion reporting falling demand dropped from 12% to 4%. Improved business confidence was identified as the main driver by 67% of brokers, followed by greater product choice at 44% and lender appetite at 28%.

However, 25% of brokers said they were finding it difficult to secure funding for clients, up from 19% in Q1 and more than double the 11% recorded in Q4 2025. Brokers cited higher interest rates, tighter lending criteria and lenders favouring larger corporate borrowers among the factors affecting access to finance.

The survey also found uncertainty around the impact of the new government on SME borrowing appetite. A quarter of brokers expected businesses to become less inclined to seek external funding under Prime Minister Andy Burnham, while 17% anticipated increased demand. Some 57% expected no impact, while 79% said they had seen no change in lending appetite since Burnham became prime minister.

Interest rate movements were identified as the biggest potential influence on SME funding demand over the next 12 months by 28% of brokers, followed by economic growth and customer demand at 21%, inflation and business costs at 19%, and government policy at 17%.

Chris Storey, chief commercial officer at Atom bank, said: “We are still in the early days of the Andy Burnham government, so it’s perhaps unsurprising that there has been little immediate impact on SME demand. However, it’s notable that brokers are cautious about the months ahead, and what the change in Prime Minister means for borrower appetite.

“While accessibility is good on the whole, it is somewhat of a concern that the proportion of brokers reporting problems in securing funds for their clients has increased for two straight editions of our study."

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