Business loan statistics

How have UK businesses fared with their borrowing?

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Businesses all over the UK face financial instability daily, which often requires outside funding in the form of a business loan. We have looked into how the state of borrowing for these businesses differs between industries over the years as well as how it differs depending on the size of the business.

The value of all business loans has increased. Among large businesses in May 2019, the real estate, professional services and support activities industry had the largest gross lending at almost £4 billion, of which it repaid three quarters (77%). Meanwhile, the smallest lending came from the education sector.

The latest facts

  • Almost a third (27%) of SMEs taking part in the British Business Bank survey 2018 reported being financed by loans
  • 73% of smaller businesses would rather forgo growth than borrow
  • Net lending of small businesses was £0.5bn in 2018 – a decrease on £0.7bn in 2017

The forecasted value of business loans in the UK

From 2017 onwards, the value of business loans has increased by an average of 3% every year. Therefore, the value of business loans is set to increase, reaching a value of £437billion in 2021.

Year Value of business loans
2017 £390bil
2018 £402bil
2019 £416bil
2020 £425bil
2021 £437bil

Business loans during the coronavirus outbreak

There are tough times for any business, especially for those who are reliant on customers. The UK government has stepped into the rescue with £330 billion to open up the possibility for businesses to survive by applying to the Coronavirus Business Interruption Loan Scheme (CBILS). Small- to medium-sized businesses with an annual turnover of up to £45 million affected by the coronavirus are eligible to apply. Each business that is eligible to get the loan may be approved to borrow up to £5 million, and as icing on the cake, the government will cover the interest fees for the first 6 months.

Bigger companies with an annual turnover between £45 million and £500 million who are affected by COVID-19 can also apply for a loan. They can apply through the CCFF (COVID Corporate Financing Facility) scheme but are eligible for up to £25 million and will be paying interest until the loan is repaid.

These loans can be applied for with one of the 40 accredited lenders and the loans are either term loans, overdrafts, invoice finance or asset finance. Lending under the Coronavirus Business Interruption Scheme has now passed £5.5 billion according to data released on May 7th.

With almost 34,000 loans now approved within the scheme, the average amount lent is a little over £164,000.

Lenders have also stepped up the approval rate of the loans. As recently as April 14th, only 21% of loans applied for were being approved. As of May 7th, the loan approval rate has soared past 1 in 2 with 54% of loan applications being approved

Date Number of loans approved Value of loans approved in £ billion
2-August 58,595 £13.08
26-July 57,234 £12.65
19-July 55,674 £12.20
12-July 54,538 £11.85
5-July 53,536 £11.49
28-June 52,275 £11.07
21-June 50,482 £10.53
14-June 49,247 £10.11
7-June 47,650 £9.56
31-May 45,843 £8.92
24-May 43,045 £8.15
17-May 40,564 £7.25
10-May 35,919 £6.09
06-May 33,812 £5.548
05-May 32,734 £5.310
04-May 31,539 £5.083
01-May 29,496 £4.746
30-Apr 27,322 £4.436
29-Apr 25,262 £4.158
28-Apr 23,548 £3.890
27-Apr 22,091 £3.647
24-Apr 20,284 £3.379
23-Apr 18,595 £3.123
22-Apr 16,624 £2.825
21-Apr 14,779 £2.538
20-Apr 13,005 £2.228
17-Apr 10,473 £1.907
16-Apr 8,780 £1.594
15-Apr 7,609 £1.376
14-Apr 6,053 £1.116
09-Apr 4,222 £0.811
08-Apr 3,313 £0.613
07-Apr 2,576 £0.453
06-Apr 2,022 £0.292
03-Apr 1,487 £0.195
02-Apr 1,250 £0.146

Large business lending and repayments by industry

The gross lending and repayment amounts of large businesses by industry in May 2019 are shown below.

Industry Gross lending Repayments
Real estate, professional services and support activities £3,797mill £2,916mill
Wholesale and retail trade £2,860mill £3,018mill
Manufacturing £2,688mill £1,969mill
Public administration and defence £1,503mill £355mill
Transport, storage and communication £1,453mill £1,064mill
Mining and quarrying £879mill £734mill
Construction £758mill £440mill
Accomodation and food service activities £665mill £579mill
Electricity, gas and water supply £608mill £608mill
Human health and social work £154mill £132mill
Recreational, personal and community service activities £94mill £190mill
Agriculture, hunting, forestry and fishing £74mill £55mill
Education £72mill £257mill
There is a general trend that repayments are similar to gross lending for most industries, apart from public administration and defence. This industry repaid only a quarter (24%) of what it borrowed during that month. After this industry, real estate, professional services and support activities owe the most, being indebted by £881 million.

Repayments and gross lending of SMEs in the UK

From July 2017-April 2018, the monthly repayment and lending of small and medium enterprises has fluctuated.

Time Gross lending Repayments
Jul 17 £5,139mill £5,327mill
Aug 17 £5,014mill £4,575mill
Sep 17 £4,870mill £4,542mill
Oct 17 £4,793mill £5,053mill
Nov 17 £4,492mill £4,451mill
Dec 17 £4,624mill £4,762mill
Jan 18 £4,251mill £4,689mill
Feb 18 £4,857mill £3,978mill
Mar 18 £4,909mill £5,218mill
Apr 18 £4,932mill £5,268mill
Gross lending was highest, at over £5 billion, during the July 2017 period and decreased until December. Following this, the lending by the small and medium enterprises increased in the three months from February 2018-April 2018. Repayments showed less of a trend over the ten-month period, supposedly due to change in each business market and environment.

Sources

Bank of England
EY
British Business Bank
Statista
UK Finance

Click here for more research. For all media enquiries, please contact:

Matt Mckenna
UK communications manager
T: +44 20 8191 8806
matt.mckenna@finder.com@MichHutchison/in/matthewmckenna2

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