Mindset, not money, behind UK SME finance gap

By Vriti Gothi

For thousands of small business founders across the UK, applying for a loan doesn’t just test their eligibility, it tests their confidence. Research at Web Summit Lisbon reveals that stigma, mistrust, and emotional barriers are silently fuelling Britain’s £65 billion SME funding shortfall, even as digital finance tools promise greater inclusion.

The report, “Borrowing Blind: Inside the Confidence Gaps Holding Back UK SMEs and the FinTechs who Serve Them,” exposes a paradox at the heart of modern finance: while technology has made credit more accessible than ever, many entrepreneurs still feel locked out by fear, complexity, and cultural discomfort.

The study found that 59% of SME founders abandon loan applications midway, citing opaque and intimidating processes. More than half associate borrowing with shame or failure, while 23% have signed finance agreements they did not fully understand. Strikingly, 82% said their confidence would improve if lenders used plain, transparent language.

The research was commissioned by Juice, one of the UK’s fastest-growing FinTech lenders and a company recently recognised in the Sifted 100, Sifted 250, and CNBC UK’s Top FinTechs. Through this initiative, Juice aims to shed light on the psychological barriers that limit access to finance and reimagine digital lending as a source of empowerment, rather than apprehension.

Katherine Chan, CEO of Juice, commented, “Thousands of founders aren’t walking away because they’re unqualified. They’re walking away because finance feels like a trap. We need to service capital alongside confidence, giving founders tools for clarity, control, and context.”

The report also features insights from Professor Nir Vulkan of Oxford Saïd Business School, who underscores the role of education in boosting financial confidence and improving funding outcomes. His analysis points to an emerging imperative for FinTech providers: to integrate behavioural understanding and education into product design.

As the UK grapples with its SME funding gap, Borrowing Blind reframes the conversation around access, positioning confidence, transparency, and trust as the next frontiers of digital transformation. The findings challenge both lenders and FinTechs to build systems that are not only efficient and data-driven but also empathetic and inclusive.

In doing so, the research signals a powerful shift in focus: the future of finance will not be defined solely by innovation, but by understanding.