Opposing foreign investment only adds to the SME bankruptcy problem
Andrew Rich, managing partner at HW Fisher, part of the Sumer Group, argues that resisting foreign capital is no longer an option, as London’s SMEs need new capital flows to stave off bankruptcy. Looking at the balance sheets of firms across the capital, he notes that foreign capital is welcomed by a consenting board, and is rarely the victim of the asset-stripping narrative peddled by the press.
London is undoubtedly one of the world’s leading business hubs, packed with innovation and healthy competition. As a result, it’s one of the most attractive markets for global investors – and they are turning their attention to the capital to invest in more of our businesses. While the narrative around these mergers and acquisitions is mixed, I’d argue this investment is hugely beneficial for the City’s businesses, and our SMEs in particular. We cannot afford to push it away.
Right now, London is at the centre of the UK’s M&A boom. Foreign bidders are keen to jump in on the action, and, in turn, the value of UK M&A has more than doubled in the first half of 2026, according to PwC research. Yet amid this flurry of international interest, high-profile corporate acquisitions of the likes of Segro and easyJet have drawn out some concerns about "corporate raiders at London’s gate" in City headlines.
Instead of a bad thing, I view this international interest as an opening. We have a golden opportunity to capitalise on the influx of investors while interest is high, and expand this funding to London’s smaller businesses at a time when they need further resources to drive expansion. Realistically, foreign investors – with deep wells of capital – are already here. Why deter them?
London has countless sector strengths, particularly across the financial and creative industries, including e-payments, gaming, advertising, and fashion – the list goes on. Injecting foreign capital will only level up businesses across these sectors, many of which are on the cusp of incredible success. International investment means larger research and development budgets for these high-potential SME businesses, which could be the final piece of the puzzle, allowing them to innovate and reach new heights.
The benefits of overseas funding don’t stop there, because foreign investment is instrumental in attracting top talent to London. It allows SMEs to offer stronger employee attraction and retention packages and build market-leading teams that accelerate business growth. In fact, optics alone can often be enough to draw in talent; a well-resourced firm known to be going for growth is far more likely to catch the eye of an exceptional individual. As they move into the area, from the rest of the UK as well as overseas, they bolster the City and its economy and further cement London as a hub for career-driven professionals at the top of their industry.
It’s also important to mention that, if the board or other decision-makers do not want to accept a form of capital, they do not have to. International investment is a choice, and increasing the number of firms willing to offer it to London’s businesses will only strengthen the City, especially at a time when the landscape for SMEs is more challenging. Changing government policies have made it tougher to navigate evolving tax rules, wage growth, and broader international economic disruption. Forecasting and financial planning only become harder when you can’t anticipate what’s around the corner – and that’s something we see frequently in our tax and accountancy work.
It’s vital we ensure our SMEs have what they need to navigate this changing world. They are the biggest driver of our GDP and integral to our international standing. Everything flows from our SME ecosystem; Revolut did not become Revolut overnight – the biggest global businesses all start as smaller enterprises, and if we want to encourage and enable more to turbocharge their growth, we must ensure the foundations of this business landscape are strong. Diverse sources of capital are a big part of that.
SME leaders are savvy and experienced when it comes to utilising the full breadth of funding options available to them, but there’s no denying that better access to international investment would be of huge benefit. That is why we must work harder to ensure every avenue of funding is wholly accessible.
The most successful, bustling markets in the world have diverse, deep wells of capital available to the brightest and the best. And London should be no different. Foreign investors are keen to expand in this market, and now is the time to encourage them into the City, not push them away.
