UK SMEs turn to revenue-based finance to ease repayment stress

By Puja Sharma

• 365 Finance’s recent customer survey highlights latest funding needs of UK businesses
• Revenue-based finance offers SME owners funding with peace of mind

Soho-based 365 Finance, a lender specialising in revenue-based finance, has started the year with a customer survey revealing that SMEs across the UK opt for this type of funding because it acts as a risk-sharing financing option, reducing payment anxiety.

Revenue-based finance is increasingly popular with entrepreneurs seeking business growth. This is due to repayments being a reflection of sales performance, meaning that when revenue slows, the payment amounts reduce, offering greater flexibility in terms of cash flow, along with peace of mind for business owners.

SMEs across the UK are increasingly prioritising funding solutions that ease payment anxiety, with revenue-based finance emerging as a preferred option. According to 365 Finance’s Q1 2026 customer survey, business owners value this model because repayments flex in line with sales performance, reducing the stress of fixed obligations. As one respondent put it, “The pain point isn’t the cost of finance, it’s the fear of overstretching repayments.” This adaptability makes revenue-based finance a risk-sharing mechanism, aligning lender and borrower interests while offering peace of mind to entrepreneurs navigating uncertain trading conditions.

The survey revealed that SMEs most often seek funding for cash flow support, stock or inventory purchases, and renovations or improvements. Emergency repairs and equipment upgrades followed closely, with urgent bills also cited as a common driver. These priorities highlight the reality that SMEs often operate with limited buffers, requiring flexible funding to address both planned investments and unexpected shocks.

When deciding on finance options, SMEs consistently weigh factors such as overall cost, available funding amounts, speed of approval, ease of application, repayment flexibility, and the quality of ongoing customer service. As one business owner explained, “It’s not just about getting the money—it’s about knowing the funding won’t become a burden when sales slow.” This sentiment reflects a broader FinTech trend: entrepreneurs are demanding funding structures that embed adaptability into repayment schedules, reducing default risk and fostering long-term resilience.

Warren Abbey, CEO of 365 Finance, reinforced this point, noting that “Revenue-based finance offers a solution to payment anxiety due to how payments are taken, never overstretching the SME.” His comments underline the shift in SME lending towards models that prioritise stability and trust, rather than simply speed or cost.

For FinTech readers, the rise of revenue-based finance signals a significant evolution in SME financing. Traditional loans often fail to account for the volatility of small business revenues, while revenue-based models are designed to move in rhythm with performance. This approach not only supports growth but also mitigates risk for both sides of the transaction. With funding amounts ranging from £10,000 to £500,000 and approvals delivered at record speed, revenue-based finance is positioning itself as a key instrument for SMEs seeking to balance ambition with financial peace of mind.