The study examined the relationship between bank loans and the growth of Small and Medium Enterprises (SMEs) in Kabale Municipality, Uganda. A cross-sectional survey design was employed, collecting data from 120 SME owners and managers through structured questionnaires. The results revealed a significant positive relationship between bank loan accessibility and SME growth (r = 0.672, p < 0.01). Specifically, 68.3% of SMEs that accessed bank loans reported increased revenues, while 71.7% expanded their operations. However, the study identified significant barriers including high interest rates (mean = 4.21/5), stringent collateral requirements (mean = 4.15/5), and complex application procedures (mean = 3.89/5). The study concluded that while bank loans significantly contributed to SME growth in Kabale Municipality, access remained constrained by prohibitive lending conditions. It was recommended that financial institutions develop tailored loan products with reduced interest rates, flexible collateral requirements, and simplified application processes for SMEs. Additionally, the government should establish credit guarantee schemes to reduce lending risks and encourage banks to extend credit to SMEs.