What Momenta Finance’s £125m Lending Uplift Means for UK SMEs in 2026
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On 9 February 2026, Momenta Finance announced that it has closed a £125m forward flow facility with a global investment bank. The lender says this will support a new streamlined tiered loan structure to scale its SME origination. It also states it can now offer interest rates starting from 7% per annum and extended tenors, effective immediately for new applications. Business Money
The same announcement emphasises broker workflow improvements, specifically a single application process, where the lender assesses eligibility and then offers the most competitive tier available based on trading history and asset profile. Business Money
Another industry write up notes Momenta’s product range across business and property lending, including unsecured and secured loans and property products. FinTech Futures
What is a Forward Flow Facility, and Why Does it Matter to SMEs?
A forward flow facility is a form of institutional funding where a bank or investment partner agrees to purchase or fund eligible loans originated by a lender, typically under agreed criteria. In simple terms, it can give an alternative lender more firepower to lend, without relying only on its own balance sheet.
For SMEs, the practical impact is not the funding structure itself. It is what that structure enables:
- More capacity: the lender can approve more deals, and potentially larger deals, without hitting internal limits as quickly.
- More product tiers: tiered pricing can allow stronger applicants to access cheaper rates, while higher risk profiles still have an offer, but priced higher.
- More stable origination: institutional support can reduce the stop start pattern some smaller lenders experience when they pause to refinance.
It is still important to be realistic. More capacity does not mean approvals become automatic. It usually means the lender can scale within its criteria, and refine its pricing and process.
How This Fits the UK SME Finance Picture in 2025 to 2026
The UK SME lending environment has been shaped by higher interest rates, tighter affordability checks, and cautious demand. But there are also signs of gradual normalisation, with pricing moving and demand shifting between products.
For example, Bank of England "Money and Credit" data shows the effective interest rate on new loans to SMEs was 6.18% in November 2025, after 6.26% in October. That does not mean all SMEs get those rates. It is an average rate across new lending and it will include a mix of borrower profiles and products. It does, however, provide context when you see advertised "from" rates. Bank of England
On market structure, the British Business Bank’s annual research tracks how the finance landscape for smaller businesses has diversified beyond high street banks over the last decade, including challenger banks, asset finance, debt funds, and other specialist providers. British Business Bank
Government research has also highlighted that a significant share of SMEs use external finance, including credit cards, overdrafts, and loans, with usage patterns varying depending on business size and circumstances. GOV.UK
In that context, a £125m facility for a specialist lender is not just a single company story. It is a data point in a wider pattern: specialist lenders and funders are building distribution and underwriting systems that aim to deliver speed and predictability for SMEs and brokers.
What the New Tiered Loan Structure Could Mean for Borrowers
Momenta says it is launching a streamlined tiered loan structure designed to scale origination and remove the need for brokers to pre judge eligibility. The lender states it will assess the application and offer the most competitive tier available based on trading history and asset profile. Business Money
If you are an SME borrower, tiered lending typically works like this:
- Tier 1: strongest profile, longer trading history, stable cash flow, strong affordability, and possibly a clearer security or asset position. This tier gets the best pricing.
- Mid tiers: acceptable risk but with more variability, such as shorter trading history, uneven margins, seasonal cash flow, or limited security. Pricing is higher to reflect risk.
- Higher tiers: more complex or higher risk cases, where approval may still be possible but the lender will typically want stronger mitigants, like security, personal guarantees, or stronger evidence of repayment capacity.
The benefit is that you might not need to guess which “product” you qualify for. You apply once, and the lender prices you into a tier. The risk is that some borrowers focus too much on the lowest advertised rate, even though they may not qualify for that tier.
What This Means for Brokers and Intermediaries
The Business Money announcement positions the changes as broker centric. It highlights a single application workflow and reduced need to pre judge eligibility. Business Money
In the broker channel, incremental process changes can matter as much as pricing. A single application workflow can reduce time spent matching a client to the correct internal product, and can reduce rework when a deal is close but not quite in the expected box.
For SMEs, better broker workflows can translate to faster outcomes, but only if the lender’s underwriting is consistent and documentation requirements are clear. This is one reason Funding Agent encourages borrowers to compare not only rates, but also speed, documentation load, and pre approval clarity.
Reality Check: “Rates from 7%” Does Not Mean Everyone Gets 7%
It is normal for lenders to advertise “from” rates. Momenta states its loans now start from 7% per annum. Business Money
The key is to interpret that number correctly:
- Starting rates are typically for the strongest tiers, where the lender sees lower risk and stronger affordability.
- Total cost can include fees, such as arrangement fees, broker fees, exit fees, or early settlement terms.
- APR vs flat rate can create confusion. Two products can look similar at headline level but differ materially in total cost and cash flow impact.
A helpful benchmark is that Bank of England data showed the average effective rate on new SME loans was around the mid 6% range in late 2025. Again, that is an average, not a guaranteed offer, but it is useful context. Bank of England
Who Might Benefit Most From More Capacity and Tiered Pricing?
Not every business needs a term loan. Not every business is a fit for a secured facility. But when a specialist lender increases capacity and adds tiered pricing, certain profiles may see more options.
Established limited companies seeking growth or refinance
Businesses with 2 plus years of trading, consistent revenues, and a clear reason for borrowing often benefit most from tiered pricing. If the goal is to refinance expensive borrowing taken out in a higher rate period, small improvements in pricing can materially reduce monthly repayments.
Asset backed or security friendly cases
Momenta’s announcement references “asset profile” in its eligibility assessment. Where security is available, lenders can often offer longer terms or better pricing, depending on the product. Business Money
Broker introduced borrowers with complete documentation
A streamlined workflow is most effective when the applicant can provide clean bank statements, management accounts, and a coherent explanation of purpose. If your documentation is patchy, even the best workflows slow down.
How to Compare Momenta Against Alternatives
A lender’s increased capacity is useful, but borrowers still need to compare options. Here are the practical comparisons to make.
1) Product fit
- Unsecured term loan: usually simpler, often quicker, but pricing reflects cash flow risk.
- Secured loan: may allow larger amounts or longer terms, but involves security and potentially more documentation.
- Revolving credit or overdraft alternatives: suited to working capital swings, but pricing and renewals vary.
- Invoice finance: suited to B2B businesses with strong receivables, and can scale with sales.
- Asset finance: suited to funding equipment, vehicles, and other assets, with security linked to the asset.
2) Total cost and cash flow impact
Ask for a clear breakdown: interest rate, fees, repayment schedule, and early settlement terms. This matters because two lenders can show similar headline pricing but very different total costs.
3) Eligibility and underwriting style
Some lenders are highly scorecard driven. Others lean more into relationship or manual underwriting. A tiered structure suggests the lender can price different risk profiles, but you still need to know what pushes you into a higher tier.
4) Speed and documentation
If time matters, ask how quickly the lender can issue heads of terms, the typical time to completion, and what documentation is required at each stage.
5) Purpose alignment
If your use is short term working capital, a long term amortising loan might be the wrong tool. If your use is asset purchase, an unsecured loan might be more expensive than asset finance. Matching purpose to product is often the biggest driver of cost and risk.
What This Signals About the Direction of SME Lending
There are two main signals in Momenta’s announcement.
Signal 1: Institutional funding partnerships are becoming a bigger part of the alternative lending engine
The announcement explicitly references a forward flow facility with a global investment bank. This points to continued institutional appetite to back specialist lenders, as long as underwriting standards and portfolio performance remain within expectations. Business Money
Signal 2: Competition is shifting from only “who is fastest” to “who can price risk more precisely”
Tiered pricing is not just about lower rates, it is about segmentation. The lender can potentially win more prime deals with sharper pricing, while still serving riskier profiles at higher tiers.
This aligns with the idea that the SME finance market is increasingly diverse, with different types of providers serving different niches. British Business Bank
Practical Next Steps for SMEs Considering Finance in 2026
- Start with purpose: write down what the funding is for, and whether you need flexibility or fixed repayment certainty.
- Prepare your pack: latest bank statements, management accounts, and a short explanation of the funding use.
- Benchmark pricing: understand where your profile may sit relative to averages, but expect pricing to vary by risk and product.
- Compare more than one route: term loan vs revolving style facility vs receivables or asset backed options.
- Ask for total cost: interest, fees, and settlement terms, so you can compare like for like.
If you want to compare options quickly, you can use Funding Agent to match your business to suitable lenders across our panel and then compare terms side by side. Check eligibility
