Mid-market British firms are rejecting the ‘SME’ label, saying it misrepresents their scale and growth trajectory as they grapple with crippling costs and access to finance.
Small and medium-sized enterprises (SMEs) have fewer than 250 staff and annual turnover of less than or equal to £44million, accounting for 99.9 per cent of UK businesses.
But the breadth of the definition fails to account for the differences between established firms and microenterprises, with fewer than 10 staff, say business leaders.
Research by lender Shawbrook reveals two-thirds of mid-sized businesses, which typically have between 50 and 249 employees and turnover of £5million to £100million, say they want to drop the term entirely.
Meanwhile, seven in 10 bosses question the usefulness of lumping medium-sized firms in with the smallest firms, which they have ‘very little in common with’, and are regularly assumed to be smaller than they are.
It has become a source of frustration for British businesses, preventing access to finance reserved for small business finance products during a period of mounting costs.
Mid-market British firms are rejecting the ‘SME’ label, saying it misrepresents their scale and growth trajectory
Over half of mid-sized firms say their business is too big for most banks’ products, rising to 63 per cent among larger mid-market firms with turnovers between £50million and £100million.
Neil Rudge, chief banking officer at Shawbrook, said: ‘Between the rise in employer National Insurance costs that took effect in 2025 and ongoing global instability, mid-sized firms are being squeezed from all sides.
‘They are acting as shock absorbers, taking on higher costs while trying to limit the impact on their customers and employees. That leaves less money for new equipment, new sites and new jobs.’
The Employment Allowance, worth up to £10,500 to firms with between 10 and 150 employees, makes a ‘far bigger difference to a small firm’s costs than to a mid-sized one’.
He added: ‘Mid-sized firms are ready to invest across the country, but they need to be recognised in their own right. That means testing Budget measures against their specific needs, rather than assuming what works for the smallest businesses will work for them too.’