For years now I have bragged that FundOnion’s fastest deal took only 19 minutes; platform sign up to funds into the bank. It’s a great line. It works well at dinner parties when I have to explain what we do as quickly as possible; it sounds impressive during pitches. For reasons largely unknown to themselves, people think that we’re geniuses.

However, it is also, I've come to believe, absolutely the wrong brag. That's not because it isn't true (it is), but it's because it celebrates the wrong variable (speed). Because the whole industry, which includes stakeholders such as the government, my own company, colleagues in industry, and interested onlookers, has been celebrating the wrong variable for over a decade now.

This is a first memo in a series about the SME finance industry.

I'm seeking here to explain my take on how these markets are actually working, why they’re remaining immature, and what it would take to mature them.

And in this spirit I've decided to kick things off with the lens and the perspective that everyone uses and just assumes is the gold standard.

If you ask any politician, platform, or trade body what's wrong with SME finance, you will get the same answer: that SMEs have trouble in “access to funding”. They’ll speak about how SMEs can't access finance. We must help SMEs access finance.

Access, access, access.

And, in truth, I’ve never liked this language, but not just for cosmetic reasons. "Access" implies that there is simply funding sitting there on tap, waiting to be disbursed, withheld only by friction or by the indifference of big bad bankers. It frames SMEs as a demographic who have some kind of a moral claim on capital. This inevitably ends up framing the solution as policy when the undertone is one of charity.

The record speaks for itself. The Government's Bank Referral Scheme - the flagship "access" intervention implemented by the Small Business, Enterprise and Employment Act 2015, has been an abject failure, simply referring businesses into a void at ridiculously low conversion rates.

Back in 2025, I spoke with Philip Hammond about the need for deeper funding liquidity for ordinary SMEs, not venture capital, not unicorns, and I was met with blank incomprehension about how this industry works. Taking this example, the Mansion House pension reforms, when they finally arrived, were a political laser designed to channel institutional money towards VC and growth equity. The steady current of the economy, the 5.5 million businesses that employ 60% of the private sector, was overlooked again.

So, why does the establishment keep getting this wrong? The reason is really simple. Because talking about "access" is just an exercise in moral theatre. It lets everyone signal concern for SMEs without understanding how the market actually works.

It’s the entirely wrong question.

And if you are asking the wrong question, don’t be surprised that you are getting the wrong answers.

Here is what the access framing misses entirely: lenders want to lend.

They are, in fact, under relentless pressure to deploy their capital lines. As a newsflash: lenders are businesses who borrow money just like their own borrowers. It's a bit meta.

So then, let’s follow the breadcrumbs of the capital chain. An alternative lender in the UK is rarely lending its own money. iwoca draws on facilities from banks like Barclays or credit funds like Waterfall. Similarly, players like Funding Circle and their peers are funded by asset managers and credit funds. Go one step further up and you’ll find pension money - ordinary people's retirement savings, allocated to private credit funds, allocated to lenders, allocated to SMEs (thus is the cycle of finance).

Every party in that chain has investors and stakeholders of their own demanding that capital be deployed swiftly and within defined risk parameters. A fund mandated to deploy low-risk capital will require minimum turnover, profitability thresholds, clean credit history, sometimes homeownership from directors. A fund deploying riskier capital will relax those thresholds and charge a premium for it. Neither is hoarding. Both are just operating within their ecosystem, fair enough I say.

So, the unsophisticated categorisation and view that the market is a vault with a reluctant gatekeeper is just plainly wrong. It is a matching problem between borrowers and lenders, each with constraints.

So there’s not really an access issue playing out here. The money is there, you just have to ask for it. This is particularly true in an age where you can simply ask Claude or ChatGPT where you should borrow money from.

Indeed, calling it an “access” problem is like saying that someone who smokes two packs of Marlboro Red every day has an “access to life insurance” problem. He can get a policy, it just will be done at a price that reflects the risk.

So when it comes to funding, the better question is whether you, at this moment, fit the parameters of someone obligated to deploy it, and therefore what price that dictates.

Once you’ve defined yourself into a corner and labelled the issue as “access”, the answer flows logically, I’ll admit: make access “faster”. And thus an entire industry - FundOnion absolutely included - embarks on a journey of identity built all around speed. Faster decisions. Same day funding. My 19-minute deal.

Speed mattered when funding took three months. But once a business can realistically be funded in three to ten working days, the marginal gains of doing so collapse. Compressing six hours to two hours to thirty minutes to "instant" adds almost nothing.

This is because a credit facility is not a McDonald's milkshake. It is one of the most consequential decisions a business owner makes. Our own data bears this out: even when same-day fulfilment is available, customers take days to decide; not because the machinery is slow, but because it’s a decision that deserves taking some time over.

Speed is an optimised (even over-optimised) variable. The industry has hit a brick wall and keeps running into it harder. That’s what we call “innovation”, folks.

So, if the issue isn’t access, then what is it?

Timing.

Personally I love this, and it’s a much more elegant question. It’s also something that is self-evident from my perspective, but almost nobody talks about it.

We all know that a business gets credit-graded at the moment it applies. And when do most businesses apply? When they need the money. Which is to say, at or near their worst moment (anecdotally I see around 30% of businesses applying at this point). Cash is tight, the bank balance is thin, the trading picture is stressed.

So then Mr. or Mrs. Borrower presents themselves to the lender at the bottom of their own cycle, gets graded as risky, and receives less money, at higher cost, on shorter terms.

Then we all stand around lamenting "access."

See why this makes no sense?

Whereas I know of scenarios where the same business, applying four months earlier - when they have strong cash position, a clean run of trading - would have been a different credit profile entirely. Cheaper money, more of it, longer terms, more lenders competing. Nothing about the underlying business model or their operations changed.

Only the timing did.

Now consider how the other capital markets work. Would you buy shares in Apple without looking at the chart, the upcoming earnings, the analyst notes? Probably not. Public market participants are drowning in timing information. Yet a UK business owner taking on debt, in a market worth more than £80 billion a year, does so with no chart, no signals, no sense of where they sit in their own cycle or the credit cycle. All they have to go on is their own (or their advisor’s) instinct. And people are animals at the end of the day - so the instinct usually says “I will wait until it hurts”, which is precisely backwards in terms of credit-grading logic sadly.

This is what I mean when I say the SME Capital Markets are immature. Not that capital is absent - but that one entire side of the market is operating blind, and everyone has accepted this as normal.

You have a mature market where both sides are informed. Lenders already are miles ahead of borrowers: they have underwriting models, portfolio data, risk pricing. Borrowers are not. This is no-one's fault, it’s simply that it’s made historical sense for lenders to invest in understanding these things. Borrowers haven’t been able to until today (more on that later).

The asymmetry is total, and the "access" rhetoric entrenches it by treating the borrower as a supplicant rather than a participant in a transaction.

The mature framing is the one used everywhere else in finance: where borrowers act as informed counterparties who understand their own position, can monitor their own health, and come to market at the moment of maximum strength. Large corporates have this infrastructure - traditionally it's been called “going to an investment bank”. The CFO at the Coca-Cola Company doesn't worry about "access" to the bond market; he times when to go to it, and gets advised by people whose job it is to know when the window is open.

SMEs have never had that function. And I think they should. I think the businesses that form the mainstay of this entire economy deserve the same quality of capital markets intelligence that the corporate world takes for granted. Not as charity, but because an informed borrower is a better credit, and a market of better credits is better for lenders, for funds, and for the pension money at the top of the chain. It’s mutually beneficial. It’s long-term greedy.

That's the project.

Let’s answer the Less Obvious Question. Let's end the “access” conversation altogether, and begin working on a market where timing is a known, watched, managed variable for the 5.5 million businesses currently flying blind.

Till next time,

James