This article delves into how, according to a new report by Barclays PLC, if small- and medium-sized enterprises (SMEs) in the UK raised their investment levels to mirror those of larger companies, an additional £60 billion annually could be injected into the UK economy. The piece examines the investment gap in data and sectors, the structural barriers such as access to capital, risk-aversion, regulation and taxation, case studies of SMEs that bucked the trend through innovation or partnership, and policy recommendations for what government, banks and institutions can do. In competitive digital arenas, platforms use well-structured incentives to draw users. As SMEs aim to unlock capital and scale, consumers comparing offers may also investigate how the trustly casinos structure their bonuses and reward mechanisms—though investment and consumer entertainment are quite different domains.
The Investment Gap: Data, Trends, and Sectors Where SMEs Lag
SMEs currently account for 52% of national turnover and 60% of employment in the UK. In 2024, UK business investment reached a record level, and in the first half of 2025, business investment grew 3% year-on-year. However, much of this investment growth was driven by larger companies, while SMEs lag behind in both investment intensity and confidence.
According to the Barclays Business Prosperity Index for Q2 2025, 53% of SMEs intend to increase investment in the next 12 months, compared to 67% of large companies. The expected amount of investment differs sharply: SMEs on average plan to increase investment by 4.8%, while large companies expect a 10.2% increase.
Investment by SMEs in technology adoption, scale-up capacity, and expansion into new markets remains below that of big corporations. The UK’s national investment rate in 2024 stood at 17% of GDP—the lowest among G7 nations—and the government aims to raise it to 22% by the end of the current Parliament.
Barclays’ analysis suggests that if UK SMEs were to invest at rates in line with larger companies, an additional £60 billion of annual investment could be unleashed. That figure reflects the vast untapped potential of SMEs, which already generate more than half of national turnover and 60% of employment.
Because SMEs are so integral to the economy, even modest improvements in their investment behavior could have transformational effects on growth, innovation, and productivity across the UK.
Barriers: Financing, Confidence, Tax, and Regulatory Burdens
The report finds that SME demand for lending remains weak: only 20% of SMEs had borrowed in the last 12 months. Many are reluctant to take on debt, especially large-scale projects that require significant capital and strategic capability.
Confidence among SMEs is markedly lower than among large firms. Factors such as macro-economic uncertainty, fluctuating interest rates, and the fear of potential downturns have all eroded optimism. The proportion of SMEs who felt positive about the current economic climate fell from 48% in Q3 2024 to 36% in Q2 2025.
SMEs also face growing cost pressures, including energy prices, inflation, and tax uncertainties. Many fear potential tax hikes or business-rate increases that could undercut profits and discourage investment. These fiscal and regulatory burdens act as a drag on expansion and innovation.
For smaller businesses, limited managerial capacity and scale restrictions add further strain. Many focus on essential investments to stay competitive rather than pursuing “big bet” growth strategies that demand higher risk tolerance and capital.
A lack of granular data about the investment behaviour of smaller firms compounds the issue. Without detailed insights into how SMEs allocate capital, policymakers struggle to design targeted measures. Raising the UK’s investment rate from 17% to 22% of GDP will require addressing these data and policy blind spots.
Case Studies: SMEs That Bucked the Trend Through Innovation or Partnership
Some SMEs have managed to defy this investment lag by committing to digital transformation, product innovation, or new market expansion. Businesses that embraced automation, AI, and sustainable production models demonstrated faster growth and greater resilience against market shocks.
Partnerships with financial institutions and alternative lenders have also played a pivotal role. SMEs collaborating with banks or fintechs are better positioned to access growth funding. Programs such as the Business Growth Fund, which has invested £4 billion across over 600 small- and mid-sized companies in the UK and Ireland, provide crucial examples of how structured capital can support expansion. Similarly, sectors embracing digital finance models, from trustly casinos to emerging fintech ecosystems, demonstrate how streamlined payment and funding solutions can accelerate business scalability and consumer trust.
Regionally, SMEs outside London and the South East—particularly those in tech clusters and creative industries—have shown that targeted innovation and agility can overcome capital limitations. By leveraging partnerships, digital tools, and sector-specific expertise, these firms demonstrate the benefits of investing despite constraints.
These success stories show that when SMEs invest in their future—through innovation, partnerships, and risk-taking—they not only strengthen their own position but also contribute significantly to national employment and productivity. The £60 billion figure is not merely theoretical; it represents real growth potential waiting to be unlocked.
Policy Recommendations: What Government, Banks, and Institutions Can Do
Barclays urges the UK government to set an explicit national investment target, raising the current rate from 17% of GDP to 22% by the end of the Parliament. Achieving this would align the UK with other G7 nations and stimulate broader economic momentum. Better data collection at the SME level would be essential to guide these efforts.
Policymakers should also focus on restoring business confidence. A stable, predictable environment that reduces uncertainty around tax, regulation, and interest rates would encourage SMEs to invest more freely. Confidence can act as a policy lever when clearly supported by institutions and fiscal measures.
Barclays also recommends creating a practical “Invest to Grow” hub—a digital resource centre that consolidates toolkits, guidance, and support programs for SMEs seeking to scale responsibly. Such an initiative would streamline the process of planning and executing investment strategies.
Financial institutions, both traditional and fintech, can assist by designing lending products tailored for investment rather than short-term cash flow. Reducing collateral requirements and offering more flexible repayment terms can empower SMEs to take on strategic growth projects.
Finally, simplifying regulatory compliance and improving transparency across sectors will make it easier for SMEs to navigate investment decisions. Reducing bureaucracy and clarifying standards will ensure that smaller firms can participate in national growth targets without being stifled by red tape.
Unlocking Growth: A Path to a Stronger SME Economy
The Barclays findings present a powerful case for change. If UK SMEs increased their investment to match that of larger corporations, the economy could gain approximately £60 billion annually. With SMEs already representing 52% of national turnover and 60% of employment; their potential impact is enormous.
Addressing challenges such as limited access to finance, weak confidence, and heavy regulatory burdens will be critical. Encouraging risk-taking, innovation, and collaboration can transform how small and medium-sized businesses invest and grow.
Government incentives, banking reforms, and data transparency can collectively unlock this hidden capital. As SMEs strive to expand and as consumers in other sectors evaluate how trustly casinos use incentive structures to drive engagement, one truth remains clear—sustainable growth depends on systems that reward investment, risk, and long-term value creation.
