Brokers point to Budget worries for stalling appetite for commercial borrowing

18 November 2025

Brokers report client concerns about potential tax changes in upcoming Budget
Drop in brokers reporting rising appetite for commercial lending among businesses in Q3 SME Pulse
Green tax breaks would prompt borrowing to fund efficiency improvements

Concerns about potential tax changes in the upcoming Budget may be behind the stalling appetite for commercial borrowing seen by brokers, the latest SME Pulse from Atom bank has revealed.

Atom bank, the UK’s highest rated bank on Trustpilot, carries out a quarterly poll of commercial mortgage brokers, gauging their experiences and expectations for the market in the months ahead.

The SME Pulse for Q3 2025 found brokers reporting significant levels of concern among their clients about potential changes in this month’s Budget, prompting businesses to bring forward or delay investment decisions.

Mounting concern

Speculation is mounting about potential tax rises to be announced by the Chancellor in the Budget, which will be delivered on 26th November.

The latest Pulse suggests that uncertainty is leading to unease among brokers’ commercial clients. The vast majority of brokers (92%) said their clients had some level of concern about potential property tax or Capital Gains Tax changes in the Budget, with over half (53%) stating their clients were ‘very concerned’.

There was similar disquiet about rumoured changes to business rates, where the vast majority suggested clients are worried - again well over half (54%) of brokers said their clients were ‘slightly concerned’, while a third (32%) reported clients as being ‘very concerned’.

As a result, two fifths (41%) of brokers said their clients were delaying investment decisions until they have a clearer idea of the tax implications following the Budget.

Softening demand

The brokers in the SME Pulse reported a slowing demand from business borrowers for external funding.

Half of responding brokers said appetite from clients was unchanged, an increase of four percentage points from the last edition of the Pulse. Meanwhile there was a five percentage point drop in the proportion of brokers reporting increasing demand, to 41%.

However, this softening demand could be quelled in the event of a reduction in tax or business rates at the Budget. Almost all (92%) said that if costs were reduced, they believe appetite for borrowing from clients would increase, with nearly half (48%) likely to invest in new premises, and almost a third (29%) would take the opportunity to expand their team.

Green lending

Brokers were also quizzed on the attitude among their clients towards green lending.

Over a third (35%) of brokers said they were currently not discussing the need to make commercial premises more energy efficient with their SME clients, yet the vast majority (90%) said clients were likely to seek finance to fund such a project should the Budget offer new tax breaks for green business improvements.

This suggests green finance represents an opportunity for brokers should the necessary incentives make it into the Budget. Even if it doesn’t, there will be some clients who might benefit from advice on funding efficiency improvements, yet those discussions are not currently happening with brokers.

Tom Renwick, Head of Business Lending at Atom bank, commented:

“Demand from business borrowers seems to have plateaued, with exactly half of the brokers polled for the SME Pulse reporting no change in appetite. And the reason seems pretty clear - this month’s Budget. Given the uncertainty about potential changes to the tax system, some business owners are understandably opting to pause their plans until they have a clearer picture of their future costs. Tax represents a significant outlay for SMEs, so it’s little wonder brokers are seeing so much concern among their clients about the likelihood of larger bills.

“A focus on overheads is perhaps also influencing considerations about energy efficient improvements. Businesses want to reduce their energy bills, whether driven by financial concerns, environmental worries, or both. However, that will only be possible if the sums add up, which is why owners will be keen to see whether the Chancellor will outline relevant tax incentives.

“What will be key for businesses as they pursue their next steps is access to easy, fast and flexible finance. Brokers clearly believe that in the event of new business incentives, their clients will want to act. Lenders need to be ready to support those borrowers once the dust settles post-Budget, while brokers will need to prioritise working with lenders best placed to support their SME clients.”