SME lending grows 13% in 2024

Gross lending to UK SMEs by the main high street banks increased by 13% in 2024 to just over £16bn, new figures released by UK Finance have shown.

The banking trade body revealed that gross lending was up in each quarter last year compared to their corresponding quarters in 2023.

However, UK Finance noted that SME lending remains significantly below the levels reported in the years prior to the COVID pandemic.

In the latest data, published in UK Finance’s Business Finance Review, there were notable increases in new lending to agriculture, real estate, health, and recreation, compared with 2023, whereas manufacturing, transport and storage saw falls in gross lending. Net lending remained negative at around minus £7bn, showing that businesses are continuing to pay back more than they borrow.

Last year also saw an increase in the number of new loans and overdrafts approved to SMEs. Loan approvals climbed annually by 23% to just under 45,000 while overdraft approvals increased by 47% to just under 59,000.

Managing director for commercial finance, David Raw, said that 2024 was a “more positive year for SMEs”, with demand for new finance turning a corner compared to the previous year.

“Gross lending by the main high street banks was up and we also saw increases in the number of loan and overdraft approval numbers,” Raw commented.

“SMEs are the backbone of the UK economy and banks have funding available to support them to invest and grow. We know the economic outlook remains challenging, but lenders are ready to support SMEs with their plans for 2025 and beyond and help them succeed.”



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