How UK businesses can unlock growth in 2026: Funding and finance options
With 2026 now under way, businesses should not rule out their options for growth, says Steve Grice, midlands regional manager for UKSE.
January can be a time of optimism for those looking at what the 12 months ahead can bring but positivity about the economy seems in short supply.
The UK economy is expected to grow at a modest pace. KPMG projects GDP growth of 1.0 per cent, while the CBI has upgraded its forecast to 1.3 per cent following the Autumn Budget.
While this represents only modest growth, some may welcome the stability compared to the shocks of recent years, during which business leads have become used to operating against a backdrop of uncertainty.
The Bank of England is expected to continue its gradual monetary easing cycle throughout 2026, the CBI projects inflation to reduce to 2.6 per cent but the unemployment rate is forecast to remain hovering around 5 per cent.
If these predictions come true, many of the West Midlands’ business owners may welcome a predictable lull after the recent shocks of the pandemic, the conflicts in Ukraine and the Middle East, plus the shockwaves of the tariffs introduced by US President Donald Trump.
If the UK economic outlook for 2026 presents a picture of gradual stabilisation rather than dramatic growth, for community-based lenders like UKSE, this environment creates opportunities for supporting borrowers as conditions slowly improve.
For the optimists in our business community, the combination of falling interest rates, moderate inflation and stable growth offers a cautiously optimistic backdrop.
At UKSE and our partners in the Midlands SME Finance group, which was set up to promote responsible community-based lending, we would encourage anyone curious about potential growth to look at the options available to get funds to realise their plans.
At UKSE, our driving force is to generate growth, create jobs and bolster the economy rather than be focused on narrow financial returns.
From our Midlands office we support SMEs across Birmingham, the Black Country, Coventry, Staffordshire and Telford.
UKSE makes minority equity investments in a range of businesses, ensuring management stays in control and offering a flexible exit policy.
Unsecured loans up to £200,000 are also available, often without the need for personal guarantees.
Having invested in West Midlands firms since our launch in 1975 we consistently encourage businesses to investigate the options available in order to have plans to capitalise upon when the time is right.
Anyone in business for even a short period of time knows things change from the planning stage to realisation.
Specialist in factory automation and robotics solutions Mechatronic Production Systems Limited, based at Kings Norton Business Centre in Birmingham, has secured export deals in the face of upheaval in the UK economy after receiving funding from UKSE.
Despite customers in domestic markets pausing long term investment due to international tariffs Mechatronic, which supplies factory production and robotic process automation to leading automotive, industrial, medical device and aerospace companies, has employed new staff and is targeting growth, all through focussing on the opportunities overseas.
The company approached UKSE in 2024 for backing to fund growth. Managing director Tony Parker-Watkins said recently that the business needed to adjust its plans in the face of national and global economic challenges.
Tony said: “We reapplied our focus outside of the UK and have picked up significant projects for customers in the EU and Asia. We are committed to serving customers in the UK but we have been able to make the most of these opportunities further afield.
“We have recruited two new people and the business is on target and structured to achieve growth. Our focus is now on building our overseas new business pipeline as there is plenty to fight for.
“The funding from UKSE has enabled us to capitalise on these opportunities. We are looking to recruit, subject to the work in the pipeline being secured.”
For community lenders and SMEs alike, now seems a sensible time to explore growth opportunities, particularly if the economic conditions continue, albeit slowly, to align for those ready to act.
Equity finance can help you speed up expansion plans or take a big step forward while loans, whether they are to buy new assets, invest in staff or just cover the day-to-day, can be as flexible as the people who need them.
January is a time for resolutions and looking forward. With a new year under way the question may now not be whether to pursue your plans but how soon you can capitalise on a window of relative stability.
Growth rarely announces itself with fanfare but with the right support it emerges when preparation meets opportunity.
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Pictured from left to right: Steve Grice and UKSE regional executive Mark Lowe