Are your eardrums ready?
Pantomime season is here and if you’re lucky enough to have a ticket, expect the volume to rise as “oh no it isn’t!” and “oh yes it is” echo around the theatre.
Every panto needs its cast of characters: the unsung hero, the plucky underdog and a few twists. As the Responsible Finance team pulled on our Christmas jumpers, we reflected about who takes centre stage in the world of business finance.
This year, we’ve shone a spotlight on the growing issue of high-interest, under-regulated business lending. CDFIs have notably saved small firms tens of thousands of pounds a month by refinancing expensive, short-term loans on better terms. That means businesses can thrive, slashing monthly costs and freeing up cash flow to invest and grow. Firms also use CDFI finance to invest in equipment, staff, marketing, premises, IT and other initiatives to expand.
So why don’t more businesses find their way to CDFIs? Partly, it’s due to awareness. Despite decades of impact, and business lending by CDFIs rocketing by 40% in 2025, CDFIs remain a best-kept secret in UK finance.
The tide is turning. In the past few years, there have been hundreds of positive media articles about CDFIs in the national press, with great coverage on national broadcast media (including a Channel 4 documentary this year) and podcasts too.
Groundbreaking investments into the sector by Lloyds Bank and through the British Business Bank’s Community Enable Funding programme won’t just move the dial, they’ll crank it up. Increased capital to lend is amplified by improved capacity thanks to the Responsible Finance and JPMorganChase programme, which is already helping CDFIs with technology, marketing, innovation, and a multitude of other initiatives.
Meanwhile, a pilot scheme through which Lloyds Bank is referring businesses to CDFIs is already bearing fruit. NatWest Banking Group hosted Responsible Finance’s 2025 Impact Report launch event once again, to which we welcomed the Economic Secretary to the Treasury and many partners and investors. And the Government’s recent response to the Access to Business Finance consultation was peppered with positive references to CDFIs, their impact, ambitions to scale them up and for even more partnerships between CDFIs, banks and other partners.
That’s the good news (oh yes it is!). But we wanted to see just how well known CDFIs really are. So, we commissioned Opinium to put a set of questions to a national sample of 500 senior decision-makers in SMEs, made up of sole traders, micro-enterprises, small, and medium-sized enterprises.
Results from our Opinium research of small business decision makers
We asked which types of finance provider they knew about. Just one in five (21%) have heard of CDFIs, whereas 46% are aware of online business lenders. More than half (58%) of respondents had sought finance (from anywhere) in the past 12 months (mainly from banks), but only 67% had been successful, with success rates lower for smaller businesses. And of those businesses which were not successful in receiving the finance they needed, less than four out of ten, just 39%, were given any suggestions about other potential options.
The research gives Responsible Finance a baseline to measure from as we embark on new initiatives to raise CDFIs’ profile in 2026. It gives us other insights, including firms’ plans for the year ahead (more than half of the businesses surveyed might seek finance, mainly for business growth and expansion), main barriers to accessing finance (being deemed too high risk, having insufficient collateral or a less than perfect credit score), and what they want from a finance provider (someone who understands their business, which is CDFIs’ superpower).
It also demonstrates the urgent need for more partnerships between larger finance providers, such as mainstream banks, and CDFIs. It’s been showcased in the stories from incredible businesses like Miss Macaroon, Alpkit and many more: CDFIs nurture and grow banks’ future business customers.
But sometimes, businesses arrive at CDFIs burdened with unsustainable short-term debt. That’s not in anyone’s best interest. Whether it’s down to misaligned incentives, some brokers chasing commissions, or firms simply not knowing CDFIs exist, it’s a reminder of why education and collaboration matter.
There’s a silver lining. The plucky underdog always wins through in the pantomime. The unsung hero gets the recognition they deserve.
At Responsible Finance we know it’s our responsibility to build on the incredible achievements of our members this year. To continue to work with the brilliant partners in banks and other large organisations which are committed to an inclusive finance ecosystem. To cement our relationships with supportive commercial finance brokers, and be even more effective at educating brokers who don’t know about us. And, along with our members, to listen to and engage with the UK’s micro and small businesses, using the right language, messaging and a diverse range of channels, so businesses know how CDFIs might be able to support them.
It’s been an impactful year, not only due to the people you can see at the front of the stage. CDFIs’ stellar performances growing businesses, creating jobs, and saving firms (and people) money would not be possible without everyone in our crew.
All of our partners and stakeholders deserve a round of applause. Thank you for working with us in 2025 and here’s to the year ahead.