Market volatility and shifting competitive dynamics are headlining boardroom agendas, according to the new Interpath Specialist Lender Survey. While the sector continues to evolve and a measured approach is needed to face challenges, the financial advisory firm says that lenders with strong management teams, robust capital bases and established platforms will be best placed to grow and secure investment.
The survey by international advisory firm Interpath, which was conducted in collaboration with J.P. Morgan, canvassed the views of more than 75 specialist lenders in a survey running to February 2026. These specialist lenders have a combined loan book of £41.8bn.
According to the findings, macroeconomic stress remains the dominant concern for the Specialist Lending sector, retaining its position as the foremost challenge. The survey also shows that competition has surged to become the second most significant issue, with one in four (25%) respondents now citing it as their primary challenge, up notably from last year (9%) and reinforced by strong responses across second and third place rankings.
At the same time, indicators of sector risk are moving sharply up the agenda. The proportion of respondents pointing to increases in defaults has risen, and new concerns such as fraudulent originators and fraudulent borrowers have entered the top tier of challenges for the first time.
Ownership transition makes gradual progress amid active dealmaking
Although the data shows that founder ownership remains prevalent, appearing in 81% of businesses, transition is happening steadily rather than rapidly. The past year has seen several transactions, including major lenders acquiring specialist platforms, illustrating continued strategic interest in the sector. Private equity activity remains selective but that gap is being filled by trade, bank and private credit money as confidence builds.
Despite this measured pace of change, respondents remain focused on growth. More than a fifth say they lack sufficient equity to support expansion over the next 12–24 months, and a third (33%) are considering a raise within the next year. The survey shows that lenders are prioritising product diversification, investment in technology, and the raising or refinancing of debt capital. Reflecting this, an overwhelming 93% of firms expect to renew, amend, or increase their debt facilities in the next one to two years.
Stuart Mogg, Managing Director and Head of Financial Services Capital and Debt Advisory at Interpath, said: “This year’s survey shows a sector that is both maturing and being tested. While momentum in the ABS markets and sustained investor appetite continue to underpin activity, specialist lenders are operating in an environment where macroeconomic uncertainty, intensifying competition and rising cases of fraud in the sector are increasingly intertwined, with subtle signs of unease emerging in certain segments of the industry. Fundamentally, this needs a measured and considered response to ensure an appropriate response at a firm level, but also from the industry as a collective.
“Against this backdrop, firms are having to balance near term resilience with long-term strategic change. The pressure on equity availability, growing scrutiny of funding structures, and the slow pace of founder succession all point to an industry facing meaningful structural decisions. At the same time, the strong emphasis on product diversification, technology investment and debt refinancing signals that lenders remain focused on building scalable, futureproof platforms. Taken together, these dynamics suggest that 2026 could be a defining year for the Specialist Finance industry.”
Ben Tucker, Securitised Products Group Sales at J.P. Morgan, said: “This year’s survey highlights an evolving market, both in terms of competitive dynamics and expectations around capital – relationships with funders appear to remain critical whilst structural flexibility and covenants are more in focus than historically. As specialist lenders prove their scalability, institutional investors, particular venture capital firms, look to be more comfortable investing in the market. As this trend develops a clear capital strategy will be key for lenders.
“The equity pressures identified in the survey are plain to see, with 22% of lenders not having sufficient equity over the next 12 to 24 months, whilst only 1% are considering an exit in the next year, down from 7% last year, presumably in part due to the biggest challenge flagged – macro-economic stress. However, we continue to see robust demand for high quality issuance and a growing pool of institutions willing to back well-structured platforms. The lenders that combine rigorous underwriting with a thoughtful capital strategy will be best positioned to capture that demand as the sector enters its next phase of maturity.”
Interpath Specialist Lenders Survey: https://brochure.interpathadvisory.com/view/958571127/1/
