Lenders have money to lend, but they would rather lend it to bigger, existing customers. That is the picture in the Bank of England's Agents' summary of business conditions for September 2026, published on 11 September. For a small firm looking for finance this autumn, it explains a lot.
01What the Bank of England's agents said about credit
The Bank's agents talk to businesses across the UK every reporting period. This round covers the six weeks to the middle of August.
On credit, the message is clear. According to the summary, credit supply continues to outstrip demand, and the gap is widening modestly across all sizes of firm.
Banks are prepared to lend to firms of every size but prefer larger, existing clients. Competition for good borrowers has increased. The big lenders compete mainly on price. Smaller specialist funders compete on speed and on accepting more risk.
Then the line that matters for a founder. The agents report less appetite to lend to smaller firms, to firms at risk of losing revenue to AI, and to construction and hospitality firms with a weak track record.
02Why demand for borrowing is weak
Businesses are not queuing up to borrow either. According to the summary, appetite for borrowing is still cautious because the outlook for the UK is subdued. Larger firms are paying down debt, including loans taken out during the pandemic. Some are keeping funding headroom in reserve rather than using it.
Borrowing costs are still seen as a constraint. We looked at where those costs come from in our piece on gilt yields and fixed rate business loans.
Investment intentions are uneven, but the agents report tentative signs they are turning slightly positive for the year ahead. Some essential projects that had been paused are restarting. Construction and property firms remain the least likely to invest.
03What this means if you run a small firm
Three things.
First, a no from a bank is not a verdict on your business. The agents describe lenders choosing by size and sector, not only by the numbers in front of them. Our guide on what to do when your accounts do not tell the whole story covers that situation.
Second, the same summary says asset finance and invoice discounting facilities have grown. Where a bank is cautious about an unsecured loan, finance secured on equipment or on unpaid invoices is often still available.
Third, the smaller lenders are competing on speed and on risk appetite. That is where a broker earns its keep. A broker can look at the deal across a wider range of lenders, including the ones competing hardest for new customers right now.
If you are planning to invest in the year ahead, it is worth understanding your business growth finance options before you approach a lender. The next Agents' summary is due on 30 October 2026, two days after the Autumn Budget.
