That represents a substantial increase from the 45% of brokers who reported increasing appetite among SMEs in the bank’s final survey of last year.

SMEs are embracing the opportunities presented by more favourable pricing, according to commercial brokers, despite the broader economic challenges facing the UK.

Lower interest rates (55%) were the most dominant factor in that increased appetite, brokers reported, ahead of business confidence (38%), greater appetite from lenders and improvements in lender policy (both 21%).

Purchasing a property has become a more powerful driver for SME borrowing, accounting for almost half of the loans taken out by businesses, brokers said.

That is a notable increase from Q4 when it was the purpose of a third of SME loans and suggests businesses across the country view now as a positive time to secure a home for their activities for the future.

Refinancing existing debt has also grown in popularity, representing nearly a third of loans (up from 21%), ahead of growth and business expansion (17%).

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Increased appetites for borrowing need to be matched by lenders if these businesses are to succeed with their plans, so it is welcome that there has been positive movement on access to SME funding according to the brokers surveyed. 

In addition, brokers expect investors to continue to look for opportunities as a result of more competitive property pricing in 2024.

Around three quarters (73%) of commercial brokers said they expected investors to take advantage of the property market bottoming out this year.

David Castling, head of intermediary distribution at Atom bank, commented: “2023 was undoubtedly a difficult one for commercial borrowers, but our latest Pulse survey shows that attitudes are changing, with SMEs recognising the chance to take advantage of lower interest rates than were available last year.

“That property purchase has become a more common driver for SME borrowing is a reflection not only of the borrowing costs, but also the pricing of commercial premises, which have taken a hit in recent times.

“There are increasing opportunities for businesses to secure the perfect home for years to come, and at an attractive price.”