One in four commercial brokers expect SME lending appetite to fall under Andy Burnham, as funding access tightens for a second straight quarter
A quarter of commercial brokers believe small business borrowers will be less willing to seek external finance under the new prime minister. That is the finding of Atom bank’s latest SME Pulse survey for Q2 2026, published even as underlying demand shows signs of recovery.
The poll, which Atom bank conducts quarterly with commercial brokers, found that 25% of respondents expect SME lending appetite to fall under Burnham’s government. Meanwhile, only 17% anticipate an increase.
Seventy-nine per cent of brokers reported no observable shift in SME borrowing appetite since Burnham took office on 20 July. A further 57% predicted the change of government would have no lasting impact on demand. For brokers working with business clients, the data points to a pipeline where caution rather than confidence is shaping initial conversations.
Brokers ranked interest rate movements as the dominant force shaping SME borrowing over the coming year, at 28%. Economic growth and customer demand followed (21%), then inflation and business costs (19%), and government policy (17%) trailing behind.
Biggest expected driver of SME demand — next 12 months
Source: Atom bank SME Pulse, Q2 2026. Respondents selected their single biggest expected driver of SME demand over the next 12 months. Figures do not sum to 100% in source material; 15% shown as “not stated”.
Demand recovering, but from a low base
The Q2 data offered some encouragement. More than a third (38%) of brokers said SME client demand had risen, three percentage points higher than Q1 2026. The share reporting falling demand shrank to just 4%, down from 12% the previous quarter.
Improved business confidence was the primary explanation, named by 67% of respondents, with broader product choice (44%) and greater lender appetite (28%) also cited. That signal broadly aligns with the Confederation of British Industry (CBI)’s September 2026 Growth Indicator, which found businesses’ overall outlook is the least pessimistic in almost two years.
Are brokers finding it harder to secure SME funding?
Beneath the demand recovery, a less comfortable picture is forming around credit availability. One in four brokers (25%) said they were finding it difficult to secure funding for SME clients. This was up from 19% in Q1 and more than double the 11% who reported accessibility issues in Q4 2025, a record low at the time.
Stricter lending criteria, rate pressure, and a tilt among lenders toward larger corporate clients were the factors brokers most commonly identified. UK Finance figures show gross SME lending hit a five-year high in Q1 2026. And yet, commercial brokers report the smallest borrowers are finding it harder than ever to get a deal done.
Chris Storey, chief commercial officer at Atom bank, pressed on the trajectory. “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,” he said. “Lenders should work closely with brokers to establish which types of business are having the most difficulty in securing funds, and where support can be improved.”
From City Hall to Downing Street: Burnham’s housing record
Burnham holds no formal history as housing minister — his Cabinet roles under Blair and Brown ran across the Home Office, the Treasury, Health, and Culture. But nine years as Mayor of Greater Manchester gave him more direct experience of the housing market than most of his predecessors at Number 10.
Housing and homelessness were signature issues of Burnham’s mayoralty. On his first day in Downing Street, he pledged what he called the biggest council house building program since the post-war period.
For mortgage brokers, a prime minister who spent a decade wrestling with housing supply, landlord regulation, and affordable housing finance is a different proposition from most of his predecessors. He arrives at Number 10 with an operational understanding of the pressure points they navigate every day. More than half of mortgage professionals say it is too soon to judge what his premiership means for the market.
What the intermediary market is watching most closely is the Budget. Rate movements remain the single biggest factor brokers expect to drive SME demand over the next 12 months. Broker calls for bold action on stamp duty and rate policy have grown louder since Burnham took office. How that experience shapes his approach to housing supply, lending conditions, and affordability will become clearer once the Budget lands.
