The latest SME Pulse survey from Atom bank has revealed what commercial mortgage brokers want from lenders this year.

Lower interest rates, easier access to finance and an improved standard of communication from lenders are top of the wishlist for 2025.

The SME Pulse is a quarterly poll of commercial brokers carried out by Atom bank, gauging their experiences and expectations for the market.

The SME Pulse for the final quarter of 2024 polled brokers what they would like to see this year from lenders in order to boost the commercial sector.

Lower interest rates was by far the most common response, though significant numbers also called for easier access to finance through relaxed lending criteria, smoother processes and bespoke products.

In addition, advisers said they wanted to see improvements to the services and communication offered by lenders, in order to build stronger relationships with brokers and their clients.

THE YEAR AHEAD

The Q4 Pulse survey revealed that the main focus for the majority of commercial brokers in the year ahead is growth.

77% said that expanding their business was their priority in 2025, ahead of conducting more business in a specific sector (13%), cost cutting (3%) and greater incorporation of automation (3%).

Of those looking to conduct more business in a specific sector, healthcare (33%), finance (20%) and retail (20%) were the most common responses.

BUSINESS BORROWER APPETITE

56% of brokers questioned said they were seeing demand from their commercial clients grow, compared with a paltry 5% who said demand was dropping.

Brokers said that this is being driven by improving business confidence. 41% of advisers pointed to a greater level of confidence among their business clients, ahead of the 39% who cited lower interest rates and the 25% who noted greater appetite from lenders.

Despite growing confidence among many SMEs, 70% of brokers said that their clients felt the Budget had been negative for their business, with particular concerns expressed around the impact of the changes to National Insurance contributions. Others said they were concerned about what impact the Budget would have on the property market.

By contrast, just 9% had a positive perception of the Budget’s impact on their business.

The reasons for borrowing are unchanged from the Q3 edition of the SME Pulse, with property purchase once again the top driver. More than half (56%) of brokers said this is the main purpose for borrowing, ahead of growth and expansion (18%) and refinancing of existing debt (18%). The latter has been consistently falling as a reason for borrowing across recent quarters, according to the SME Pulse.

Brokers were also quizzed on what the main driver is for selecting a specific lender for their clients.

Rate was by far the most significant factor, named by almost half (48%) of brokers. This was followed by flexibility of criteria, pinpointed by one in four (27%) brokers, relationship (16%) and speed to offer (10%).

David Castling, head of intermediary distribution at Atom bank, said: “It’s encouraging to see the growing levels of optimism among commercial brokers for 2025 and beyond.

“After the challenges of the last few years, and despite some reservations around the Budget, it seems that plenty of businesses are looking to raise funding to help them invest and meet their aspirations, and that is understandably boosting confidence among brokers, who themselves are keen to grow.

“However, it’s clear that lenders in this market can go further to deliver the support that businesses require. Brokers want to see lenders focus their efforts on providing not only competitive rates, but bespoke packages which specifically meet the needs and circumstances of businesses.

“They also want to see a greater emphasis on developing smoother processes and a greater standard of communication. Lenders who want to win the support of brokers and deliver more funds to UK businesses need to take this feedback on board.”