Business loan statistics and trends 2024

What are the latest statistics on financing for SMEs and small businesses?

Businesses all over the UK sometimes require outside funding in the form of a business loan, whether to invest in growth or maintain daily operations. We look at the most recent business loan statistics and trends and how lending to small businesses and small to midsized enterprises (SMEs) has changed over the years.

Business loan statistics: Highlights

  • The total value of business loans was £516 billion in 2023.
  • Loans to SMEs were worth £65.1 billion in 2022.
  • The average small business loan was £14,000 in 2022.
  • In 2023, 39% of SMEs sought finance with a value of £25,000 or more.
  • Capital funding was the biggest driver of SME financing demand in 2023.
  • 1 in 5 SMEs (22%) feel concerned about repaying their financing.

What is the value of business loans in the UK?

In 2023, a total of £516 billion was lent to businesses in the UK, down slightly from £553 billion lent in 2023. Business loans peaked in 2020 during the coronavirus pandemic, with £653 billion lent in total.

Year Business loan value (£ billions)
2023 £516.47
2022 £553.30
2021 £480.81
2020 £653.35
2019 £518.73
2018 £545.26
2017 £516.49
2016 £468.98
2015 £410.89
2014 £379.89

Small business and SME lending statistics

Lending to small and medium-sized enterprises (SMEs) by all banks was £59.2 billion in 2023, down from £65.1 billion in 2022.

Loan repayments by SMEs were higher than loans granted in 2023, at £68.51 billion. This is the third year that repayments have been higher than lending, following the significant lending seen in 2020.

Year Gross bank lending to SMEs (billions) Gross repayments from SMEs (billions)
2023 £59.17 £68.51
2022 £65.12 £73.51
2021 £57.71 £65.75
2020 £104.87 £57.91
2019 £56.94 £54.83

The team at Funding Options by Tide shared exclusive insights with Finder on the trends they saw among their customers in 2023, which we are likely to see continuing into 2024. We’ve outlined these statistics below:

  • Funding Options received 130,000 lending applications in 2023.
  • The average business loan amount requested was £100,000.
  • Capital funding was the biggest driver of SME financing demand in 2023, used primarily for managing day-to-day cash flow and business growth.
  • Terms loans were the biggest category of finance products in 2023 – a lump sum borrowed from a financial institution with a fixed repayment schedule over a set number of years.

They also shared the top 5 industries seeking business financing, which were:

  • Wholesale and retail trade of motor vehicles and motorcycles
  • Construction
  • Accommodation and food service activities
  • Administrative support service activities
  • Professional, scientific, and technical activities

How many SMEs apply for finance?

Fewer SMEs applied for external finance in 2023 compared to 2022, with just 3 in 10 (30%) seeking this opportunity, down from around 4 in 10 (39%). This number is the lowest it has been in the last 5 years, with 44% applying for finance in 2019, 60% in 2020 and 59% in 2021.

Year Number of SMEs applying for finance
2019 44%
2020 60%
2021 59%
2022 39%
2023 30%

What is the average small business loan amount?

The average value of finance sought by SMEs was £14,000 in 2022, up from £10,000 in 2021. Businesses with no employees, such as sole traders, had a lower loan value of £10,000, while SMEs with employees had a higher loan value of £25,000.

In 2023, there was an increase in the number of firms seeking finance with a value of £25,000 or more, with 39% of businesses looking for this larger number. 34% of businesses wanted a loan of less than £10,000, while a quarter of businesses (25%) were looking for financing between £10,000 and £25,000.

What are the main reasons SMEs apply for a loan?

Acquiring working capital is the most popular reason for seeking finance among SMEs, with almost two-fifths giving this as a driving reason (58%). The next most common reason is the purchase of fixed assets (31%), followed by investing in business growth (28%). Less popular reasons include reducing carbon emissions (7%) and dealing with energy costs (8%).

Reason for seeking finance Percentage
Working capital 58%
Purchase of fixed assets 31%
To invest in business growth 28%
To develop or introduce new products, processes or services 20%
To deal with recovery 18%
Refinancing 17%
To deal with energy costs 8%
To reduce carbon emissions 7%

Do SMEs feel able to repay their business loans?

1 in 5 SMEs (22%) feel any level of concern about repaying their finance offer, and just 3% are very concerned about doing so. This number is up from 2022 when only 1 in 6 SMEs were concerned about repaying their finance offer.

Do SMEs feel concern about repaying finance? Percentage
Not all concerned 57%
Not very concerned 18%
Fairly concerned 19%
Very concerned 3%
Don’t know 3%

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Written by

Emily Herring

Emily Herring is a Publisher at Finder specialising in credit-based products including credit cards and business and personal loans. Emily has recently joined the Investments team. She has a Masters in Creative Writing & Publishing and a Bachelor of Arts in Communication & Media. See full profile

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