Accessing finance

SME Investment Report

05 August 2016
2 minutes read

Adam Little

A lot has happened in the financial landscape this year, most recently as a result of the announcements in the 2016 Budget, the new National Living Wage and, of course, Brexit. With a great deal of change affecting small to medium businesses in these uncertain times, we wanted to know if – and how – SMEs are planning to invest in their businesses in 2016 and beyond. It was good news – our survey of over 300 SMEs found that a healthy 68% of respondents are planning to take out business finance in the next 12 months to expand their business, purchase new equipment and more.

What we found

The UK’s alternative finance market saw exponential growth in 2015. Our survey discovered that alternative finance now holds almost half the market potential with 46% of SMEs taking advantage of it, while bank loans have become the least-used form of finance (15%). From peer-to-peer lending and angel investments to a cash advance, see our guide to alternative finance here. With alternative finance making it easier than ever to support your small business, what exactly do SMEs want business funding for?


Pubs account for around a fifth of those seeking to borrow between £10,000 and £20,000. Besides nearly half of pubs wanting to expand their business (48%), other owners most often want to refurbish (42%), most likely to go towards updating their décor and menus.


15% of respondents will be looking to borrow £20,000-£30,000, a quarter of which are restaurants. As restaurants often use their cash injections to refurbish (41%), this would suggest that this sector undertakes larger projects than pubs to keep up with interior design trends, but not to the same scale as other sectors we surveyed, such as hotels and B&Bs.

Hotels and B&Bs

The hotel and B&B industry makes up almost a quarter of the 8% of SMEs who are looking to borrow a much higher sum of over £100,000 (24%). Rolling out upgrades to a number of bedrooms could account for the significantly larger loan amounts sought by this sector.

Salons and other beauty businesses

Meanwhile, salons and other beauty businesses most often want to use business finance to purchase new equipment (56%), as do chemists, opticians and dentists (64%). As customer-facing sectors with tools that are used frequently over long periods of time – not to mention technological advances – these businesses will be looking to keep their assets from becoming worn out or outdated.

The best times to take out finance

While May 2016 was a popular month for taking out an extra cash boost (15%), we can expect the next peak this coming September when 15% of businesses start to ramp up their activity ahead of the Christmas rush. Pubs, restaurants and salon and other beauty businesses are most likely to seek finance during this time (19%, 13% and 16% respectively), with the surge in Christmas parties bringing extra staff and stock costs for these customer-facing businesses.

 The full indepth report is available to download for free here.

Next Steps

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