Sole traders with ‘credit broking’ licences have seen the most significant drop since Q1 2020, with a 46.1% reduction to 2,821 in Q1 2026.
Partnership firms saw a 42.2% reduction to 1,236 in Q1.
The financial and real estate advisory group found there were 4,057 sole traders and partnerships with ‘credit broking’ permissions to negotiate funding deals for businesses. This figure fell from 7,371 in Q1 2020 at a rate of just under 10% per year, rising to 10.5% in the last 12 months.
The FCA also provided data on a category of ‘other’ firms with ‘credit broking’ permissions. It found permissions to have fallen 31% to 23,901 in Q1 2026, from 34,647 in Q1 2020.
David Mathieson, managing director in funding and insurance at BTG, said: “The market for lending to businesses right now is complex. And this complexity has only been exacerbated by uncertainty over base rate decisions on the horizon and new lenders entering the market with varying understanding, and confidence, of different industries.
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“We are seeing that many businesses are looking to increase liquidity for restructuring or expansion plans at this time. Some have significant opportunities domestically or internationally, which they need to capitalise on quickly, and this requires cash flow.
“The positive news is that there is an array of funding options available and more alternative lenders have entered the market. Nonetheless, the immediate options aren’t always the best, and are often linked to more expensive interest rates and less flexible terms that don’t match a business requirement.
“It is because of this that the falling number of licensed broker firms is an issue as businesses need to be able to choose and trust a reputable firm that can sift through the multiple options. BTG is well-positioned to do this, with access to hundreds of lenders, including asset finance and commercial finance.”
