Broker Feedback Signals a Shift in SME Lending

Broker Feedback Signals a Shift in SME Lending: Speed, Flexibility, and Data-Driven Decisions Take Centre Stage

Brokers role in shaping the UK SME lending landscape is irrefutable. Brokers have played a critical role in diversifying SME funding access, with 33% of deals facilitated by specialist lenders and 28% by challenger banks (NACFB). As the lending landscape evolves, broker sentiment suggests a fundamental transformation is underway. Traditional lenders are retreating, alternative finance is rising, and brokers are increasingly becoming the trusted advisors for small and medium-sized enterprises navigating funding decisions in an ever-fluctuating economic climate.

Recent insights from brokers across the UK reveal several recurring themes that are shaping the future of SME lending:

• Retreat of Traditional Banks: Over 50% of brokers report a consistent tightening in lending appetite from high street banks (NACFB survey). In response, 72% anticipate a significant increase in the use of alternative lenders throughout 2025 (Iwoca’s Q4 2024 SME Expert Index)

• Demand for Constructive Rejections: It is not the “no” that concerns SMEs, but the absence of clear guidance. Analysis by Funding Xchange reveals that around 7,000 bank-rejected SMEs reported that 94% of them had fixable issues such as overdraft misuse, late supplier payments and since borrowers received little in the way of advice, it discouraged reapplication. Brokers are filling this advisory gap, helping clients understand why they were rejected and how to become eligible elsewhere. (Add Citations)

• Data-Led Lending is Gaining Ground: According to Iwoca SME Expert Index, brokers are gravitating toward alternative lenders that leverage data-driven techniques to streamline application and decision-making processes and are clear on guidelines. The goal is not only to improve speed, but to offer more tailored, transparent lending experiences.

• According to Iwoca SME Expert Index: According to Iwoca’s Q4 2024 SME Expert Index , ~53% of brokers said that rising cost of doing business was the topmost concern among SMEs. Rising costs, increasing client expectations, and complex documentation are prompting brokers to look for lenders to support and who can help reduce friction at every step, particularly in document handling and decision turnaround.

• According to Iwoca’s Q4 2024 SME Expert Index: Brokers and SMEs have maintained that successful lenders are those who strike a balance between digital efficiency and personal engagement. Atom Bank's 2023 SME Pulse survey, 50% of brokers believe that integrating new technologies could improve SMEs' access to credit. Notably, 72% highlighted instant agreement in principles, 65% emphasized automated eligibility decisioning, and 44% pointed to Open Banking as beneficial technologies. The best platforms are those that enhance trust, not replace it.

In SME finance, every hour matters - yet document handling remains one of the biggest sources of delay and manual effort. Brokers often juggle incomplete, inconsistent submissions that slow down underwriting and frustrate clients. Digilytics RevEl tackles this head-on with document intelligence tailored for SME workflows.

By automating the review and extraction of data from Management Accounts, Bank Statements, and VAT documents, Digilytics RevEl helps lenders and brokers:

• According to Iwoca’s Q4 2024 SME Expert Index

• Reduce errors and manual checks with high-accuracy extraction

• Handle diverse documents with exposure across multiple asset classes

Its hybrid AI models adapt quickly to new document types with minimal training, making it ideal for lenders scaling across varied SME profiles and still depending on documentation as valid means of data exchange and application evidence.

For a lending journey that demands speed, flexibility, and trust - Digilytics RevEl removes friction where it matters most.

“Brokers are asking for speed, clarity, and smarter use of data, and they are not wrong,” said Arindom Basu, Digilytics AI. “Our role is to reduce friction where the lending process slows down most: document review, eligibility checks, and data interpretation. When we solve for that, brokers can focus on what they do best - advising and delivering.”

As SME finance continues to evolve, Digilytics RevEl remains committed to partnering with brokers and lenders to co-create an inclusive lending experience that reflects the needs of modern business owners: fast, fair, and informed.

Author: Akshat Dev, Partnership Development Strategy at Digilytics AI

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