SME Finance Applications Surge 17% as Fintech Lenders Dominate 99% of New Funding

FBX Capital Group has reported a record 984 UK business finance applications in the third quarter of 2026, marking a 63% increase compared to the end of the previous year. For fintech professionals, the data underscores a decisive shift away from traditional high street banks, which now represent just 1% of facilities arranged by the advisory group.

What was announced

London-based FBX Capital Group, which includes FBX Capital Partners and Funding Bay, saw application volumes rise 17% sequentially between July and September 2026, up from 842 businesses in the previous quarter. The group successfully arranged 231 finance facilities for 189 businesses during this period. The average facility value stood at £92,000, with nearly a quarter (23%) of the funded businesses being repeat clients who had previously borrowed through the group.

The data highlights a heavy reliance on unsecured loans, which were requested by 82% of applicants and accounted for 72% of all facilities arranged. Other products utilised included revolving credit, property-backed lending, and invoice finance. The group also facilitates access to asset and trade finance through its network.

A significant finding in the report is the dominance of non-traditional lenders in the current market. Fintech providers accounted for 89% of the facilities arranged during the quarter, while specialist lenders covered a further 10%. This leaves high street banks with a minimal 1% share of the activity. This trend coincides with broader market pressures; the Federation of Small Businesses recently noted that nine in ten small firms have experienced rising costs over the past year, primarily driven by taxation. Furthermore, the Bank of England’s latest Credit Conditions Survey indicates that traditional lenders have reduced credit availability for SMEs and are expected to tighten it further in the coming months.

"Demand has risen every quarter over the past year, and this was our busiest yet. Businesses are borrowing to invest and manage costs, but the lending market has become increasingly fragmented, with hundreds of lenders offering different products."

Alex Fenton, Partner at FBX Capital Group.

The companies involved

FBX Capital Group is a London-based financial advisory firm that has been operating in the SME debt finance space since its founding in 2017. The group is composed of two primary entities: FBX Capital Partners and Funding Bay. Its core business model focuses on bridging the gap between small and medium-sized enterprises and a diverse network of lenders, ranging from traditional institutions to digital-first platforms.

The firm specialises in navigating a complex lending landscape to secure various types of capital, including secured and unsecured loans, asset finance, and trade finance. By positioning itself as an intermediary in a market that includes hundreds of different providers, FBX Capital Group has carved out a niche helping businesses identify specific funding solutions that traditional banking structures may no longer provide. While the group operates within the broader UK financial services sector, its recent activity highlights its role as a facilitator for the fintech ecosystem, as evidenced by the overwhelming majority of its successful placements being directed toward fintech and specialist lending platforms rather than established high street institutions.

What this means

The marginalisation of high street banks to a mere 1% of arranged facilities is a stark indicator of the structural shift in UK business lending. While traditional banks tighten their belts in response to economic uncertainty and regulatory pressures, fintech lenders are no longer "alternative"—they are the primary source of liquidity for the SME sector. However, this fragmentation presents a double-edged sword. While choice has never been greater, the complexity of navigating hundreds of niche providers creates a high barrier to entry for time-poor business owners. The industry is moving toward a model where specialized advisory is becoming as critical as the capital itself to ensure businesses can navigate a tightening credit environment.