What 2026 Means for Mid-Market Commercial Businesses

As we enter 2026, mid-market commercial businesses will be hoping that this year is calmer than the last. 

The business environment has been extremely challenging for some time. 2025 saw increasing tax burdens, inflationary pressures, regulatory change, and the impact of US trade tariffs.  It’s no surprise that business confidence is fragile but as we move into 2026, official figures from the CBI revealed that the business sector closed out 2025 with business confidence improving over the year.  Many CEOs we’ve spoken with are feeling optimistic about the year ahead.

In my view, business owners and leadership teams must focus on shifting from defensive measures to how best to deploy capital to support sustainable growth.  The most productive conversations we are having today are not about whether to invest, but how and when to do so.  But investing can carry risks and must be approached from a strategic standpoint.

Discipline remains essential

Some key economic indicators in 2025 have provided room for optimism. Inflationary pressures have tempered (albeit prices continue to rise in excess of the Bank of England’s target), interest rates have gradually reduced, and there are some early signs of business confidence emerging across some sectors.

That said, mid-market businesses are likely to face persistent challenges: elevated operating costs, wage inflation, customer price sensitivity and ongoing uncertainty in global markets driven by geopolitical uncertainty. These conditions reinforce the importance of disciplined financial planning and robust cash-flow management if firms are to grow and invest in 2026.

Capital allocation in support of clearly defined strategies is important

With limited deal flow in 2025, competition amongst lenders for high quality opportunities has been intense, with lenders making concessions on price and structure to win mandates.  Lenders are selective, focused on business models that demonstrate visibility of earnings, resilient cash flows and a clear strategic rationale for borrowing.

For businesses seeking funding in the £5m - £20m range, capital allocation has become a strategic decision rather than a transactional one. I feel strongly that facilities need to be structured around the realities of the business - whether that is supporting growth, investment in assets, refinancing legacy debt, funding acquisitions or providing flexibility through working capital.

In my view businesses best positioned to secure attractive terms are those that can clearly articulate how funding will strengthen their long-term position.

Investment in efficiency and capability 

Across the commercial landscape, we are seeing renewed focus on efficiency, technology and operational scalability. Investment in digital platforms, data, automation and customer experience is increasingly viewed as essential rather than discretionary.  Well-executed investment in these areas can deliver improved operating leverage, better decision-making through data insight and ultimately greater resilience during periods of economic pressure.

Growth through expansion and acquisition

I believe that 2026 can present attractive opportunities for mid-market businesses to grow through expansion – both organic growth through technological change or international expansion or growth by acquisition.

However, growth must be approached with discipline. Even positive investments can drain cash resources initially.  Successful businesses need to focus on funding strategies that preserve flexibility to enable growth without jeopardising future liquidity.

The value of specialist financial partnerships

One observation I would make is that mid-market businesses are increasingly looking beyond standard bank led lending solutions. As businesses grow in complexity, so too do their funding requirements and enlightened borrowers may be prepared to consider paying a premium for flexibility.

Working with financial partners who understand the nuances of mid-market commercial operations - and who can offer flexible, structured funding solutions - can make a meaningful difference. Facilities that evolve alongside the business are often as valuable as the capital itself. In a fast-changing world, agile lenders can support businesses to help them grasp the opportunities that present themselves, even where they are unexpected.

Looking ahead

In my view, 2026 offers mid-market businesses a genuine opportunity to move from a passive ‘wait and see’ approach to forward looking decision making. Leaders that take a proactive approach to capital planning, invest selectively and align funding with strategy will be best placed to thrive.

The coming year will reward clarity, discipline and partnership - and for businesses that get this right, 2026 can be a year of meaningful momentum.