Time Finance's Strategic Expansion of SME Lending Facilities: The Investment Case for Leveraging SME Growth Through Enhanced Financial Infrastructure

The UK's small and medium-sized enterprises (SMEs) are the backbone of its economy, yet they remain chronically underserved by traditional financial systems. According to Time Finance's 2025 Finance Apathy Survey, over 70% of SMEs are not leveraging brokers to access finance, despite these intermediaries facilitating £38 billion in SME loans in 2023. This gap represents a staggering opportunity for investors and lenders alike. Time Finance, a leading player in the SME finance sector, is uniquely positioned to capitalize on this underserved market by expanding its lending infrastructure and fostering deeper collaboration with brokers. For investors, the company's strategic focus on education, digital innovation, and tailored financial solutions offers a compelling case for long-term growth.

The Untapped Potential of SME Lending

The UK SME lending market has shown resilience in 2024, with gross lending increasing by 13% year-on-year to £16 billion. While this pales in comparison to the pandemic-era peak of £104.8 billion in 2020, the trajectory is promising. SMEs are increasingly shifting their borrowing motivations from short-term working capital (51% of cases in 2024, down from 58% in 2023) to growth-oriented investments. This shift aligns with Time Finance's strategy of promoting asset finance, invoice finance, and asset-based lending (ABL)—products that many SMEs remain unaware of. The survey reveals that 21% of SMEs are unfamiliar with asset finance, 24% with invoice finance, and 36% with ABL, underscoring a critical knowledge gap.

Time Finance's CEO, Ed Rimmer, has emphasized the importance of bridging this gap through broker partnerships. By educating SMEs on the full spectrum of financial tools available, the company is not only addressing immediate funding needs but also fostering a culture of informed decision-making. This approach positions Time Finance to capture a significant share of the £38 billion in broker-facilitated lending, a market segment that traditional banks have struggled to dominate.

A Competitive Edge Through Digital Innovation

The SME lending landscape is becoming increasingly competitive, with challenger banks and fintechs offering faster, more flexible financing options. Time Finance is countering this by integrating digital tools and data analytics into its lending processes. The company's focus on AI-driven risk assessment and streamlined loan approvals aligns with broader industry trends toward automation. For example, the use of agentic AI and machine voice in customer interactions is expected to enhance operational efficiency, reducing costs while improving service quality.

Investors should note that Time Finance's digital infrastructure is not just a cost-saving measure but a strategic differentiator. By leveraging technology to personalize financial solutions, the company can cater to SMEs' diverse needs more effectively than competitors reliant on one-size-fits-all models. This is particularly relevant in 2025, as SMEs increasingly seek tailored products that align with their growth ambitions.

Financial Infrastructure as a Catalyst for Growth

The British Business Bank's 2025 Small Business Finance Markets Report highlights the importance of robust financial infrastructure in supporting SME growth. Time Finance's initiatives, such as expanding access to asset-based lending and invoice finance, directly address the structural inefficiencies in the current system. These products are critical for SMEs that lack traditional collateral but require capital to scale operations.

Moreover, Time Finance's role in promoting cyber insurance adoption—only 40% of SMEs had coverage in 2024—further strengthens its value proposition. As cyber threats become a top risk for businesses, the company's ability to bundle insurance solutions with its lending offerings could create a sticky, long-term relationship with clients. This diversification of services not only enhances revenue streams but also reduces risk exposure for the company.

Investment Considerations

For investors, Time Finance's stock (LON:TIME) presents an attractive opportunity given its alignment with macroeconomic trends. The company's 2024 performance, including a 4.5% year-on-year increase in gross bank lending to SMEs (reaching £62 billion), underscores its relevance in a market that is beginning to outpace asset finance growth. While equity investment in SMEs has shown a more selective trend, the overall value of financing remains resilient, with challenger banks accounting for 60% of total lending. Time Finance's focus on broker collaboration positions it to benefit from this shift.

However, risks persist. The rise of neobanks and private credit providers could erode Time Finance's market share if the company fails to innovate. Additionally, regulatory changes and macroeconomic volatility—such as the 1.7% decline in SME loan rates in early 2025—introduce uncertainty. Investors must also consider the broader economic context, including the UK's lagging business investment compared to G7 peers, which could impact demand for SME financing in the long term.

Conclusion: A Strategic Bet on SME Resilience

Time Finance's strategic expansion of SME lending facilities is more than a response to market gaps—it is a forward-looking investment in the UK's economic future. By combining broker-driven education, digital innovation, and tailored financial products, the company is addressing the root causes of SME underperformance. For investors, the key takeaway is clear: SMEs are not just surviving but adapting to a rapidly changing economic environment. Time Finance's ability to provide the infrastructure and education necessary for this adaptation makes it a compelling long-term play.

As the company continues to scale its operations and refine its digital tools, it is likely to outperform peers in a sector where agility and customer-centricity are paramount. The time to act is now—before the untapped £38 billion market becomes a saturated one.