Demand for funding to support business acquisitions is growing among UK SMEs, even as many clients remain uncertain about how to secure the finance required, according to new research by Asset Advantage.
The independent lender’s latest commercial broker survey found that nearly 60% of brokers had seen an increase in acquisition finance requests this year. Of those, 47% reported a slight increase in demand, while 12% described the rise as significant.
Just 3% of respondents reported a fall, with 38% saying activity levels had remained steady.
CLIENTS STRUGGLING WITH ACQUISITION FINANCE
The survey also revealed a lack of understanding among clients about the process of funding acquisitions, management buy-outs and buy-ins. Almost half of brokers said customers struggled to understand what lenders required, particularly in relation to management information, documentation and robust business plans.
Smaller transactions were cited as being especially vulnerable to poor-quality financial projections. One broker commented that some customers assumed a business’s trading position alone was enough to secure finance.
Another noted that inexperienced buyers needed stronger projections and planning to succeed.
The findings follow Office for National Statistics figures showing a sharp rise in UK merger and acquisition activity. In Q2 2025, the number of completed deals rose by more than 20% compared with the previous quarter. The value of domestic transactions increased by £600m to £3.4bn.
ASSET ADVANTAGE SURVEY
Asset Advantage, which provides asset finance and business loans of up to £1m, said the rise in demand mirrored what it was experiencing in the market. Its loans, starting from £75,000, are often used to fund acquisitions, buy-outs and buy-ins.
Gary Thompson (pictured), sales director at Asset Advantage, said: “Reports of increasing demand for business acquisition funding certainly mirrors what we are seeing on the ground.
“Whether it’s management teams looking to seize new opportunities, or business owners looking to hand over the reins, business acquisition funding continues to be an important part of our business.
“Key to that is our ability to walk brokers and their clients through these more complex arrangements and provide 100% funding at the right levels to facilitate this type of transaction – particularly for smaller enterprises.”
He added that the survey highlighted a knowledge gap among clients, with some brokers also requiring additional support. “It is reliant on funders to use their experience and assist brokers in building their knowledge so they can confidently support clients,” he said.
Thompson pointed to the company’s use of its in-house expertise and Content Hub as part of efforts to ensure brokers had the tools they needed to guide clients through the acquisition process.
