Last updated: 10 Mar 2026 11:00 Posted in:
A few weeks into 2026, businesses across the country – along with their accountants – will be wondering what the year has in store after a challenging 2025. For many businesses, the main event in Q4 was not Christmas celebrations, but rather the Autumn Budget and the uncertain weeks leading up to it. There is no doubt that this uncertainty weighed on confidence and investment towards the end of the year.
Since the Budget, however, the Bank of England has further reduced the base rate, cutting the cost of business borrowing, with additional rate cuts forecast for 2026. Accountants and business owners have also had time to digest the measures announced in the Budget, adjust where necessary, and begin steering a course for the twelve months ahead. Despite clear challenges remaining, a recent survey of 200 of our accountancy partners suggests that accountants are embarking on the new year with a little more confidence. The challenge in the months ahead will be helping businesses turn that confidence into tangible growth.
Growing confidence amongst accountants
Embedded within communities across the UK, accountants are on the front line of the established SME economy. They help business owners to navigate an ever-shifting tax and policy landscape, while maintaining a deep understanding of their clients’ financial health and prospects. Crucially, they are also able to compare performance and sentiment across a wide range of businesses and sectors, making their perspectives especially valuable.
So how are accountants feeling about the year ahead? Encouragingly, 83% of those we surveyed expect their clients to achieve growth in 2026, with 13% forecasting high growth. Only 6% of accountants expect no growth at all. Even after the turbulence of recent months, confidence amongst accountants is proving resilient.
We also asked where accountants expect their clients to invest over the coming year. In potentially good news for UK productivity, three-quarters believe their clients will invest in new machinery and equipment as they look to modernise operations. Meanwhile, a third expect businesses to invest in digital transformation and software, as the race to keep pace with rapidly evolving technologies continues.
The persistent lending gap
The growing confidence among accountants and the UK’s established SMEs is encouraging. Yet alongside recent Budget uncertainty, these businesses continue to face a more persistent and structural challenge: the state of business banking in the UK, particularly when it comes to accessing finance for investment.
Many business owners will remember a time when business banking meant having a dedicated relationship manager acting as a trusted adviser. Lending decisions were informed by detailed understanding of a business’s circumstances and ambitions, and businesses could draw on a wide range of financial products to support growth. Today, for many established SMEs, the service they receive from high-street banks feels more limited.
As traditional lenders have stepped back from established SMEs, many businesses report being turned down for finance, even when seeking to support viable investment or expansion plans. The consequences are becoming increasingly visible.
Recent research by Allica Bank, published in ‘Rebooting SME finance to unlock growth’ (April 2025), suggests this is not simply a cyclical issue driven by recent economic volatility, but the result of long-term structural change in UK lending. The report shows that lending to established SMEs is now around £65 billion below its historic trend, equivalent to £15 billion to £20 billion per year in missing new lending when compared with the late 1990s and early 2000s, a period the report identifies as a sustainable benchmark for SME finance.
Crucially, this gap has widened over several decades. While total UK business lending is estimated to be around £140 billion below historic trends, larger corporates have increasingly been able to fill this shortfall through private credit markets. Established SMEs, by contrast, have far more limited access to these alternatives, leaving them disproportionately exposed to the retreat of traditional bank lending.
The effects of this gap are not abstract – they are already shaping the decisions and trajectories of real businesses across the UK.
Real businesses, real consequences
Behind these figures lie real businesses and real outcomes. There are event companies unable to release equity to upgrade venues, care providers struggling to finance additional facilities, and manufacturers seeking to refinance in order to support international expansion. These are not isolated cases, nor are they confined to one sector or region.
The reality is that no established business is immune to the lending gap. Its effects ripple through the economy, constraining job creation, limiting innovation and holding back wider economic growth.
Accountants recognise this challenge clearly. Nearly half of those surveyed said that while their clients receive some support from their business bank, more is needed. A further 40% said their clients receive little or no meaningful support, while just 3% believe their clients are fully supported. Crucially, 57% of accountants said they are not confident that their clients can access the borrowing they need from their current bank.
One of the most striking trends identified in recent research is the collapse of overdraft provision – a form of finance that has historically played a critical role in supporting SME growth. According to ‘Rebooting SME finance to unlock growth’, overdrafts once accounted for a significant share of SME bank finance. In the late 1990s, they represented around 31% of SME lending, providing flexible working capital that businesses could draw on as needed. Today, that figure has fallen to just 5%, marking a dramatic retreat from one of the most adaptable sources of business finance.
This matters because overdrafts are fundamentally different from term loans. They are designed to support working capital, smoothing cash flow for growing businesses, seasonal firms and service-sector companies whose income may fluctuate. Indeed, separate surveys cited in the report show that working capital remains the most common reason SMEs seek finance, particularly as businesses scale.
Accountants as true business partners
It is not only lenders that are evolving in response to these pressures. Many accountants are also redefining the value they bring to established SMEs. Increasingly, accountants are moving beyond traditional compliance-focused roles and becoming true business partners. This means offering proactive advice and insight – support that was once a defining feature of relationship-led business banking.
In practice, this starts with developing a deeper understanding of clients’ growth ambitions and the constraints they face. Rather than responding only when finance is required, accountants are well placed to help clients plan ahead: stress-testing business models, mapping funding needs against growth plans and identifying pinch points before they become barriers. Cash-flow forecasting and scenario modelling are becoming particularly important, helping businesses to understand how changes in costs, demand or interest rates might affect their ability to invest or borrow.
Accountants are also increasingly involved in investment planning. This includes helping clients to prioritise capital expenditure, assess returns on investment and build robust financial narratives that demonstrate how funding will be used productively. For many SMEs, particularly in service sectors, this means articulating the value of less tangible investments such as software, training or process improvement – areas that traditional lenders have often struggled to assess.
Alongside this advisory role, there is a growing opportunity for accountants to provide technical assistance that improves clients’ readiness for finance. This can include strengthening management information, improving the quality and frequency of financial reporting, and ensuring that forecasts are well evidenced and internally consistent. Even relatively modest improvements in data quality and financial presentation can materially increase a business’s credibility when approaching lenders or alternative finance providers.
Given this expanding remit, it is perhaps unsurprising that accountants are optimistic about their own prospects. In the survey, 79% expect their practice to grow over the next twelve months. As the profession continues to evolve, a key question is how accountants can sustainably deliver this wider range of responsibilities. For many, the answer lies in combining in-house expertise with strong external partnerships – including specialist business lenders, brokers and advisers – allowing accountants to remain trusted coordinators of financial strategy while ensuring that clients can access the right technical support at the right time.
What good business banking looks like
To better understand what accountants value, the survey also explored what good business banking should look like in 2026. When asked what would make them recommend a bank to their clients, more than three-quarters of respondents pointed to access to a dedicated relationship manager as the key differentiator. In an environment where many businesses experience banking as remote and transactional, the ability to engage with someone who understands their business can make a significant difference.
Relationship-led banking allows lending decisions to be based on a nuanced understanding of a business rather than rigid, tick-box criteria. It also aligns more closely with the way accountants themselves work with clients – through long-term relationships built on trust and detailed knowledge. Data from industry bodies shows that challenger and specialist lenders now account for a majority share of established SME lending in the UK, reflecting a shift towards models that prioritise relationships and tailored support.
Backing growth in 2026 and beyond
It is encouraging that accountants are confident about both their own prospects and those of their clients as 2026 gets underway.
However, economic challenges remain, and these are compounded by the retreat of many high-street banks from lending to established SMEs. The result is an investment gap that continues to hold back productivity and growth, leaving many viable businesses unable to invest, innovate or expand.
Closing this gap is critical to the success of the UK’s established SMEs and to the wider economy. Accountants have a vital role to play in this effort, acting as trusted advisers and helping businesses navigate an increasingly complex financial landscape.
With the right financial partners and support structures in place, accountants are well positioned to help unlock the investment and opportunities that will drive sustainable growth in 2026 and beyond. Together, we can ensure Britain’s established SMEs get the backing they need to succeed.
Author bio
Sophie Hossack
Head of Partnerships
Allica Bank
"Closing this gap is critical to the success of the UK’s established SMEs and to the wider economy. Accountants have a vital role to play in this effort, acting as trusted advisers and helping businesses navigate an increasingly complex financial landscape."
Sophie Hossack, Head of Partnerships, Allica Bank