SME Lender Increases Business Funding by 20% Amid Growing Demand for Finance

A community lender supporting small businesses across the West Midlands has reported a 20 per cent increase in lending over the past year, underlining the growing importance of alternative finance providers in helping SMEs access the capital needed to grow.

Birmingham-based ART Business Loans said lending rose by 20 per cent during the 2025/26 financial year, enabling businesses to invest in expansion, create jobs and strengthen their contribution to local economies. The organisation, which provides loans to firms that may struggle to secure funding through traditional lenders, said demand for finance remains strong across the region.

The growth comes at a time when access to finance remains a key challenge for many small businesses. While lending by major banks has shown signs of recovery, many SMEs continue to encounter barriers when seeking funding, particularly younger businesses, firms operating in underserved communities and companies without extensive borrowing histories. Recent industry data shows lending to the UK's smallest businesses has increased, although overall SME borrowing remains below historic levels.

ART Business Loans has also secured £7 million through the British Business Bank's Community ENABLE Fund, allowing it to expand lending to smaller businesses seeking loans above £25,000. The funding increases the range of support available to firms looking to invest in growth opportunities, recruit staff or purchase equipment.

According to the lender, more than three quarters of the businesses it supports are based in underserved communities. Chief executive Steve Walker said the organisation's focus remains on helping businesses that can demonstrate strong potential but may not meet the criteria required by mainstream lenders.

One company to benefit from the funding was Wolverhampton-based recovery specialist Rockhopper Recovery & Rescue, which used finance to purchase additional vehicles and expand its workforce in response to rising demand. The investment enabled the business to strengthen its operational capacity while creating new employment opportunities.

The announcement reflects a wider trend within the SME finance market, where community development finance institutions and specialist lenders are playing an increasingly important role. Industry figures show challenger banks and alternative lenders now account for a substantial share of small business lending, helping fill gaps left by traditional banking providers.

Since its establishment in 1997, ART Business Loans has provided more than £40 million in funding to over 1,800 businesses, supporting the creation and protection of thousands of jobs across the Midlands. Its latest growth figures suggest demand for flexible business finance remains strong as SMEs continue to seek investment to support long-term growth and resilience.