The Budget vs The Reality: What Lenders Are Actually Doing This Quarter

Budgets always come with dramatic headlines, but commercial lenders respond to evidence, not speeches. Labour described this Budget as a reset for the UK economy. The Conservatives dismissed it as lacking substance. Kemi Badenoch emphasised that SMEs will feel cost increases before any growth benefit.

Lender behaviour reflects all three viewpoints.

Positive signs:

• A tech company secured a growth loan with flexible repayment terms due to lender confidence in the digital sector.

• An engineering firm obtained funding for new machinery after their lender responded positively to the Government’s productivity agenda.

Caution signs:

• A retail chain was declined for a working capital loan due to concerns about consumer spending.

• A construction firm was asked for more detailed cashflow forecasts to reflect rising operational costs.

This mix of outcomes mirrors the mixed political reaction. The Budget sets a direction, but lenders want proof of delivery before moving aggressively.

If you want clarity on lender appetite in your sector, email pa@otiumpartners.com.