The Intermediary –- June 2026 - Flipbook - Page 76
BRIDGING
Opinion
SMEs need finance
unning a small
to medium
enterprise (SME)
has rarely been
straightforward,
but over the past few
years businesses have had to navigate
persistent pressure from higher costs,
economic uncertainty and changing
market conditions.
The latest Federation of Small
Businesses (FSB) Small Business
Index shows that confidence among
small firms remains fragile. While
the index improved to -53 in Q1 2026,
up from -71 in Q4 2025, confidence
has now been negative for eight
consecutive quarters.
The same report found that 87% of
firms are seeing costs rise compared
with a year ago, 54% have reported
falling revenues over the previous
three months, and 69% have been
affected by late payments.
Behind those figures are real
businesses trying to make practical
decisions. Do they invest in stock
ahead of a busy trading period?
Do they renovate premises to meet
demand? Do they move quickly on
a property opportunity? Do they
complete an acquisition, take on
new work, or manage a temporary
working capital squeeze caused by
delayed income?
For many SMEs, the challenge is
not necessarily the quality of the
opportunity itself, but having access to
funding at the point it is needed.
A firm may have a strong order
book, commied customers, an
asset sale in progress, a refinance
underway, a grant payment expected,
or invoices due to sele. But if the
money arrives aer the opportunity
has passed, the business still loses out.
That is where finance providers need
to be more than lenders. They need to
be practical partners who understand
commercial momentum.
In a more volatile trading
environment, SMEs need two
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The Intermediary | June 2026
things from their finance providers:
flexibility and dependability.
Flexibility maers because SME
finance rarely fits neatly into a
standard box. The circumstances
are oen nuanced. A business might
need funds for stock purchases,
office renovations, property deposits,
acquisitions, cashflow management,
or working capital during a period
of change. The requirement may be
short term, but the impact can be
long lasting.
Dependability maers because
business owners cannot make
decisions on vague indications.
When an SME is managing a live
transaction, a property deadline,
supplier commitments, or a
temporary cash gap, it needs clarity on
what can be delivered, when it can be
delivered, and on what terms.
This is where bridging finance
can play an important role. Business
bridging loans are typically shortterm facilities designed to cover a gap
before another event takes place.
That event might be a sale,
refinance, grant payment, invoice
selement, or longer-term loan
completing. Used properly, bridging
finance can support viable businesses
when timing is the challenge.
In practice
A recent case we completed shows
this in action. We arranged a
commercial bridging loan to support
the acquisition of an 11-bedroom hotel
in Bournemouth.
The facility was agreed for a couple
who run separate trading businesses
in the car and beauty industries and
have built up an investment property
portfolio in recent years. The property
was a currently closed B&B in a seaside
location where there is an oversupply
of overnight holiday accommodation.
The vendors had operated the hotel
as a lifestyle business, with limited
trading history, meaning no formal
accounts were available.
LUKE WATSON
is director of intermediary sales
and lending at Recognise Bank
Following completion, the
borrowers plan to apply for planning
permission to convert the property
into a large house in multiple
occupation (HMO), with the intention
of renting to young professionals. In
the interim, they intend to reopen
and trade the B&B to capture seasonal
demand and ensure the property
remains in active use.
The case required a swi
turnaround aer a previous lender
withdrew from the transaction at a
late stage. We accepted a readdressed
valuation and used title indemnity
insurance to facilitate completion,
with the loan finalised within 22
working days from application.
This is where strong intermediary
and lender relationships maer. Good
outcomes come from understanding
The challenge is not
necessarily the quality of
the opportunity itself, but
having access to funding
at the point it is needed”
