How To Support Your SME Clients Considering Selling Their Business

According to research from strategic advisory firm K3 Advantage, the number of UK SMEs that are considering selling their business is on the rise in 2025.

Out of the 250 SME founders interviewed as part of the survey, 41% said they were more likely to consider a sale, investment or refinancing over the next 12 months compared to the previous 12-month period. This means that the percentage of SMEs considering exit strategies will increase from 11% in 2024 to 14% in 2025.

But why do so many SME leaders think selling their business is the solution to financial/operational problems?

To understand why more SMEs are eyeing up sales, it’s important to look at the current business landscape and how this impacts a small business’s ability to survive and thrive. In this article, we’ll discuss why SME’s are exploring exit strategies and how you can support your SME clients as a broker. 

With this knowledge, you’ll be able to guide your clients and offer alternative solutions, such as revenue-based financing, to help business owners get through tough periods without giving up on their business.

Why Are More SME’s Exploring Exit Strategies?

It seems like there is never a good time to be a small business, but today’s business environment seems particularly tough. In fact, 75% of SME leaders acknowledge how difficult the current environment is.

One of the main issues impacting small businesses is a lack of access to external funding. In 2024, we saw equity investment into SMEs decreasing to levels as low as post-pandemic trends, which we discussed in our State of The UK SME Funding article. Last year, 12% of SMEs were rejected by traditional lenders when applying for business loans. This meant that 20% of these businesses had to hold back on workforce expansion, innovation projects and new product development.

Another key issue facing SMEs is the increase in late payments from customers and clients. In 2024, over 3.6 million (72%)  small businesses said they were owed money from customers. On average, this has put individual businesses £96,772 out of pocket, not to mention the additional burden of spending upwards of 13 hours per outstanding invoice trying to chase payments.. Across the board, the average total value of outstanding late payments is up 41% from 2023.

Another issue, which was highlighted in the K3 Advantage survey, was that 52% of small business leaders admitted to lacking full visibility of their management accounts over the past three years. This lack of oversight over KPIs makes it much harder for leaders to highlight opportunities for growth and identify areas of the business that aren’t profitable.

With external finance and data knowledge being large causes of concern for small businesses, it’s no wonder that so many are facing issues expanding and investing in their operations. For many, it may seem that selling is the only option to keep in business.

Is It Harder To Run A Business in 2025?

From the recent survey, 73% of SME owners said that running their business in 2025 has been harder than it’s ever been before. But, there are much bigger changes that are affecting small businesses.

UK inflation is expected to average 2.7% in 2025, which is lower than it has been in previous years. However, it still puts the UK at the highest rate when compared to the other G7 nations. In addition, the increase in National Insurance Contributions (NICs) from 13.8% to 15% in April will put even more pressure on small businesses. It’s estimated that for each minimum wage worker a business employs, they will have to fork out an extra £770 per year. The Budget has also added fuel to the fire, as 63% of small businesses feel that rising taxes are a major concern for their business, which is the highest level of tax concern we’ve seen among SMEs since 2017.

For many SME leaders, it’s the UK that is the problem. According to Business Matters Magazine, 66% of leaders think that the UK is falling behind other global economies, leaving us trailing behind some of the other big countries, which puts our small businesses at a disadvantage when competing on a global scale.

Alongside the wider economic outlook, there’s also the rising cost of doing business. Electricity rates, cost of goods, and the cost of hiring and retaining staff are higher than ever, which puts increasing pressure on the UK’s small businesses. It leaves leaders with few choices: cut operating costs, raise prices or look to financing solutions/exit strategies.

Is an Exit Strategy The Right Choice For a Small Business?

Although selling a business means a quick influx of cash, it also means giving up future potential, market position and control. For some SME leaders, looking into exit strategies could be the right solution, but if their concerns are around cash flow struggles, rising costs or lack of financing options, there are alternative solutions.

As a broker, you can help your clients assess whether restructuring, cost-cutting or alternative financing could provide the lifeline they need to keep in business. 

Exit strategies may seem like a simple option, but when you factor in the time and complexity involved in selling, which can take months or even years to finalise, it can often be best to view this as a last resort.

Alternative Options to Sales

Suppose a client of yours is considering selling their business due to financial concerns and cash flow issues. In this case, it may be a good time to speak to them about other options that can help them get through a tough profit period, without the permanent loss of control and future potential of their company.

Here are some options you can take them through:

Revenue-Based Financing

For service-based industries like cafes, pubs, restaurants, MOT garages, etc., where seasonal profits can be unpredictable, revenue-based finance can be a good option.

With revenue-based finance, a business essentially takes out a cash advance based on its projected future cash flow. Rather than traditional bank loans where, if you are lucky enough to get accepted, you often have to deal with minimum payment amounts and monthly charges, a revenue-based cash advance just takes a small amount from every credit or debit card transaction. Over time, your client will be chipping away at their loan, without feeling like they have a huge monthly responsibility. 

Asset-Based Lending

If your client runs a business with valuable assets such as property, equipment or inventory, they could look into asset-based lending where they use one of these assets as collateral.

Instalment Loans

These loans provide an upfront lump sum that is repaid over a fixed term through scheduled payments, covering both principal and interest. They are ideal for smaller businesses, offering predictable repayment plans that simplify budgeting and financial planning.

Revolving Credit

A flexible credit line that businesses can draw from as needed, repay, and use again. This option is ideal for managing cash flow fluctuations and covering unexpected expenses, especially for seasonal businesses.

Government Support

The Government has various grants and relief programmes designed to help SMEs, these can work well when combined with one of the other financing options above.

Working with 365 Finance

In 2024, we were able to support brokers better than ever before; relationships that we will continue to improve upon throughout 2025.

If you’d like to talk more about how you can offer our revenue-based financing options to your clients, get in touch with our partnerships team today.

At 365 Finance, we provide revenue-based funding of £10,000 to £500,000 in capital so your customers can thrive all year round. We collaborate with thousands of UK brokerages, providing unsecured finance solutions to small businesses – and market-beating commissions for you as an introducer.

To find out more, please contact a member of our partnerships team or head to our website.