iwoca SME Expert Index: Three-quarters of finance brokers say Government policies harming SMEs, with Budget likely to worsen outlook

• More than three-quarters (76%) of finance brokers think that the current Government has negatively impacted SMEs
• Two-thirds (66%) of SME finance experts expect the Government’s upcoming Autumn Budget to have a negative impact on SMEs
• Finance brokers say expanded business rates relief (39%) and a reduction in corporation tax (35%) are the key measures that would benefit SMEs

More than three-quarters (76%) of business finance specialists say the Government’s policies have had a negative impact on the UK’s 5.5m small and medium-sized enterprises (SMEs), with the situation predicted to worsen at the Budget. 

The new research finds that the criticisms of the Government’s impact on SMEs has grown, rising from 70% last quarter. 

iwoca’s Q3 2025 SME Expert Index, a survey of SME finance brokers, reveals that only 3% say the current Government has had a positive impact on the UK’s small and medium-sized firms.

‍Budget expected to be a blow for SMEs

With the Chancellor set to announce her Autumn Budget on 26 November, two-thirds (66%) of SME finance experts predict it will have a negative impact on the businesses they support, compared to just one in ten (10%) saying it will improve the situation. 

When asked what measures would most positively impact small and medium-sized firms, brokers cite stronger business rates relief (39%) and a reduction in corporation tax (35%) as their top priorities.

Following the Budget last year, iwoca’s SME Expert Index found that the number of brokers reporting pessimism among their SME clients about the future more than doubled, rising from 15% in Q2 2025 to 34% in Q3. 

Economic pressures persist

In addition to concerns about the upcoming Budget, small business owners are facing rising costs and a challenging economic environment. Nearly half (48%) of brokers cite rising running costs as their main concern, with a quarter (25%) pointing to political uncertainty – up sharply from just 5% last quarter.

Looking ahead, 85% of SME finance brokers predict inflation will remain at 3% or higher by the end of 2025, well above the Bank of England’s 2% target.

Concerns about a potential recession have also grown, with almost half of SME owners expressing worries despite the ONS reporting 0.3% GDP growth in the third quarter of the year.

iwoca SME Lending Thermometer score

iwoca's SME Lending Thermometer, first launched in Q1 2025, provides a pulse check on SME finance appetite across all UK lenders. For Q3 2025, it sits at 5.15, down from 5.63 in Q2, where 1 indicates extremely low demand for finance, and 10 represents extremely high.

Colin Goldstein, Chief Commercial Officer, UK at iwoca, commented: “Every day, we hear from small business owners who are concerned about what the Autumn Budget might mean for their businesses. With high costs and so much uncertainty, many feel under real pressure. This Budget is a valuable opportunity for the Government to give small businesses the practical support and long-term vision they need to thrive.”