Small and medium-sized enterprises (SMEs) remain the backbone of the UK economy, but many face significant barriers when seeking growth capital. The Bank of England estimates the SME funding shortfall at £22bn, while some reports suggest the gap could be as high as £56bn. This lack of access to finance constrains expansion and threatens the resilience of the wider economy.
This gap is not the result of uncreditworthy businesses. Instead, it reflects a lending environment ill-suited to the needs of smaller firms. Cumbersome application processes, high rejection rates, and limited visibility into affordability and risk contribute to the problem.
Research from Codat, a partner of financial data intelligence firm FullCircl, highlights a core issue: lenders often lack consolidated, real-time insights into the financial health and borrowing behaviours of SMEs.
Without a clear view across accounts and institutions, decision-making is slow and risk-averse.
The impact is stark. Around 39% of SMEs are deterred by outdated and intimidating application processes. 47% struggle to access external capital, while 55% resort to personal loans to fund their businesses.
Two failure points hampering SME funding
SMEs are hindered by two critical weaknesses in the system:
Manual, slow risk models that delay approvals and increase lender caution.
Fragmented data systems that make it difficult to build a full picture of liquidity and borrowing behaviour.
To bridge the gap, lenders must adopt a new approach. Rather than relying on outdated systems and reactive decisions, they need to act proactively, engage SMEs with growth-focused conversations, and streamline application processes through the use of real-time data.
Introducing FullCircl’s ProBanker
FullCircl has developed ProBanker to address these challenges head-on. Already trusted by tier 1 banks and alternative lenders, ProBanker improves visibility across more than £180bn in commercial lending exposure, spanning 17m credit agreements.
Its capabilities include:
Near real-time liquidity insights – tracking cash flow and payment trends across multiple accounts, creating a single source of truth for risk and affordability.
Unified borrowing views – showing outstanding debt and borrowing behaviours for stronger decision-making.
Proactive monitoring and alerts – flagging liquidity challenges before they escalate, enabling early intervention from relationship managers.
Operational efficiencies – reducing the burden of manual data gathering and structuring financial and credit information for smoother onboarding.
By equipping lenders with a comprehensive, real-time view, FullCircl’s ProBanker is helping to transform rejections into growth opportunities, ultimately narrowing the UK’s SME funding gap.
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