There were 5.7 million private sector businesses in the UK at the start of 2025, and 99.85% of them were SMEs. Banks charged SMEs an average 6.63% on new loans in August 2026, and challenger and specialist banks made 60% of gross SME bank lending in 2025. Only 15% of SME employers sought external finance in the past year.
At a glance
- UK private sector businesses (start of 2025)
- 5.7 million, 99.85% of them SMEs
- Average rate on new bank loans to SMEs (August 2026)
- 6.63%
- Outstanding bank loans to SMEs (August 2026)
- £204.272 billion
- Challenger and specialist banks' share of SME lending (2025)
- 60%
- SME employers that sought finance in the past year (2025)
- 15%
- Growth Guarantee Scheme lending (to 30 June 2026)
- £3.96bn across 22,947 facilities
How many SMEs are there in the UK?
The Department for Business and Trade's business population estimates count every private sector business, including the self-employed with no staff. Three in four have no employees, and most are sole proprietorships rather than companies. If you are weighing the two structures, see sole trader vs limited company.
| Figure | Value | Period | Source |
|---|---|---|---|
| Private sector businesses in the UK | 5.7 million | start of 2025 | Department for Business and Trade |
| SMEs (0 to 249 employees) in the UK | 5,681,930 | start of 2025 | Department for Business and Trade |
| Small businesses (0 to 49 employees) | 5.64 million (99.18% of the total business population.) | start of 2025 | Department for Business and Trade |
| Businesses with employees | 1.4 million (25%) (4.3 million (75%) did not employ anyone aside from the owners.) | start of 2025 | Department for Business and Trade |
| Businesses with no employees | 4,272,535 | start of 2025 | Department for Business and Trade |
| SME share of private sector employment | 16.9 million (60% of the total) | start of 2025 | Department for Business and Trade |
| SME share of private sector turnover | £2.8 trillion (51%) (Turnover excludes SIC Section K (financial and insurance).) | start of 2025 | Department for Business and Trade |
| Sole proprietorships vs companies | 3.2 million sole proprietorships (57%), 2.1 million actively trading companies (37%), 368,000 ordinary partnerships (6%) | start of 2025 | Department for Business and Trade |
How much do banks lend to SMEs, and at what rate?
The Bank of England publishes monthly lending to SMEs and the average rate on new loans; the British Business Bank and UK Finance publish annual and quarterly totals with different coverage, so their figures do not match exactly. What any one business pays depends on its own risk: see business loan interest rates, try the business loan calculator and track the Bank of England base rate.
| Figure | Value | Period | Source |
|---|---|---|---|
| Effective interest rate on new loans to SMEs | 6.63% | August 2026 | Bank of England |
| Effective interest rate on new loans to all businesses (PNFCs) | 5.57% (Down 5 basis points on July. Private non-financial corporations.) | August 2026 | Bank of England |
| Net bank borrowing by SMEs | £0.9 billion | August 2026 | Bank of England |
| Annual growth in bank lending to SMEs | 4.6% (Up from 4.1% in July. Large businesses: 8.9%.) | 12 months to August 2026 | Bank of England |
| Outstanding bank loans to SMEs | £204.272 billion | end of August 2026 | Bank of England |
| Gross bank lending to SMEs in the month | £5.512 billion | August 2026 | Bank of England |
| Gross SME bank lending (excluding overdrafts) | £68bn (Up 9% from 2024 and the second highest level since 2012. British Business Bank analysis.) | 2025 | British Business Bank |
| Net bank lending to SMEs | positive £4.6bn | 2025 | British Business Bank |
| Total bank lending stock to SMEs (term lending and overdrafts) | £198bn | December 2025 | British Business Bank |
| Gross lending to SMEs by the main high street banks | £5.35 billion | Q2 2026 | UK Finance |
| SME overdraft utilisation | 51.4 per cent (Highest since March 2020.) | Q2 2026 | UK Finance |
How many SMEs apply for finance, and how many get it?
Most SMEs use some form of external finance, often a credit card or overdraft, but only a minority apply for new finance in a given year, and most that do are offered it. The main reason for not applying is a preference for using the business's own money. Our guides on how to get a business loan and why business loans get declined cover what lenders look for.
| Figure | Value | Period | Source |
|---|---|---|---|
| SME employers using external finance | 70% (Down from 72% in 2024 and 73% in 2023.) | 2025 | Department for Business and Trade |
| SME employers that sought external finance in the past 12 months | 15% (Same as 2024.) | 2025 | Department for Business and Trade |
| Most used forms of external finance (SME employers) | credit cards (38%), bank overdrafts (26%), leasing or hire purchase (25%), loans from a financial institution (21%) | 2025 | Department for Business and Trade |
| Median amount of finance sought by SME employers | £50,000 (Mean £481,000.) | 2025 | Department for Business and Trade |
| SMEs that sought external finance in the last three years | 24% (26% in 2024 and 30% in 2023. Survey of 1,734 SMEs, fieldwork 19 September to 12 December 2025.) | 2025 | British Business Bank |
| SMEs offered finance by the first provider approached | 82% | 2025 | British Business Bank |
| Main reason for not seeking finance: prefer internal funds | 38% | 2025 | British Business Bank |
| SMEs happy to use external finance to grow | 35% (Down from 40% in Q4 2024.) | Q3 2025 | British Business Bank |
| Application success rate, all types of finance (SME Finance Monitor) | 53% (Reported in the British Business Bank report from the SME Finance Monitor; 74% in Q1 2018 to Q2 2019.) | Q1 2024 to Q2 2025 | British Business Bank |
How big is alternative and specialist finance?
Challenger and specialist banks now make most SME bank lending, and asset finance is one of the largest sources of business funding. Our guides explain asset finance and invoice finance, and the lender directory shows who offers what.
| Figure | Value | Period | Source |
|---|---|---|---|
| Challenger and specialist banks' share of gross SME bank lending | 60% (Up from 39% in 2012.) | 2025 | British Business Bank |
| Finance provided by non-bank lenders | £18.3bn | 2025 | British Business Bank |
| Asset finance new business to smaller businesses | £24.4bn (Nominal, based on Finance & Leasing Association data; 4% higher than 2024 and the highest on record.) | 2025 | British Business Bank |
| Asset finance new lending to SMEs (FLA) | £25.6 billion (Quoted by the FLA as a record. Differs from the British Business Bank 2025 figure because the period differs.) | 12 months to July 2026 | Finance & Leasing Association |
| Total FLA asset finance new business | £41,669m (Up 6% on the previous year. July 2026 alone: £3,560m, up 2%.) | 12 months to July 2026 | Finance & Leasing Association |
| Non-bank share of SME invoice finance and asset-based lending | 30% (Provisional data suggest IF/ABL advances to smaller businesses decreased in 2025.) | 2025 | British Business Bank |
| Equity investment into UK smaller businesses | £7bn (A 20% fall on the same period of 2024.) | first three quarters of 2025 | British Business Bank |
| SME employers using alternative finance | 6% (Equity, factoring/invoice discounting, peer-to-peer loans and some other finance.) | 2025 | Department for Business and Trade |
How much lending is government-backed?
The British Business Bank runs the Growth Guarantee Scheme, the Start Up Loans programme and regional investment funds. See our guides to the Growth Guarantee Scheme and start up business loans.
| Figure | Value | Period | Source |
|---|---|---|---|
| Growth Guarantee Scheme facilities (including RLS 3) | 22,947 facilities totalling £3.96bn (Government provides a 70% guarantee to the lender; scheme extended to 31 March 2030.) | as at 30 June 2026 | British Business Bank |
| GGS finance reaching businesses outside London and the South East | £2.74bn | as at 30 June 2026 | British Business Bank |
| GGS claims settled | 1,496 claims of £89.40m (2.26% of total drawn value, 6.52% of drawn facilities.) | as at 30 June 2026 | British Business Bank |
| Start Up Loans programme total | Over 100,000 business ideas supported with more than £1 billion worth of loans (No date stated on the page.) | cumulative, as shown on 15 October 2026 | British Business Bank (Start Up Loans) |
| Start Up Loans to female founders | 39% | 2025/26 | British Business Bank |
| British Business Bank public funding deployed | £1.3bn (Plus £3.7bn of lending guaranteed and £4.3bn of private sector capital.) | 2025/26 | British Business Bank |
| Private investment leveraged by the Nations and Regions Investment Funds | £233m (£0.79 of private finance for every £1 invested through the programme.) | by September 2025 | British Business Bank |
How common is late payment?
Large businesses must report how quickly they pay suppliers, and the Small Business Survey asks smaller firms how late payment affects them. Businesses owed money can claim statutory late payment interest.
| Figure | Value | Period | Source |
|---|---|---|---|
| Average time large businesses take to pay suppliers | 32 days (Unchanged from 2023 and 2024; 35 days in 2018.) | 2025 | Department for Business and Trade |
| Invoices paid late by large businesses | 15% (14% of invoice value was paid late.) | 2025 | Department for Business and Trade |
| SME employers giving trade credit that see late payment as a problem | 63% (Equates to 28% of all SME employers.) | 2025 | Department for Business and Trade |
| SME employers citing late payment as a major obstacle | 29% (Cohort B.) | 2025 | Department for Business and Trade |
How many companies start and fail each year?
Companies House counts incorporations and the size of the register; the Insolvency Service publishes company insolvencies each month. For what happens when a company cannot pay its debts, see company insolvency.
| Figure | Value | Period | Source |
|---|---|---|---|
| Company insolvencies in England and Wales | 1,946 (Seasonally adjusted; 3% lower than August 2025 (2,007).) | August 2026 | The Insolvency Service |
| Company insolvency rate, England and Wales | 50.1 per 10,000 companies (one in 200) (Down from 52.5 in the 12 months to August 2025.) | 12 months to 31 August 2026 | The Insolvency Service |
| Industry with most insolvencies | Construction (3,866, 17% of cases with industry captured) | 12 months to August 2026 | The Insolvency Service |
| Companies on the register | 5,516,377 (The financial-year release gives 5,479,045 at end March 2026.) | end of June 2026 | Companies House |
| Company incorporations | 192,287 (156,515 companies struck off and dissolved in the same period.) | April to June 2026 | Companies House |
| Company incorporations in the financial year | 815,277 (Up 1.67% on FYE 2025; 787,120 dissolutions.) | April 2025 to March 2026 | Companies House |
| New businesses added to the business register (ONS) | 79,325 (2.2% up on Q2 2025; closures 76,840. Official statistics in development.) | April to June 2026 | Office for National Statistics |
How does SME finance differ across the UK?
Most UK businesses are in England, but each nation has its own development bank or funds and its own insolvency figures. See our pages on business loans in Scotland, Wales and Northern Ireland.
| Figure | Value | Period | Source |
|---|---|---|---|
| Private sector businesses by nation | 5.0 million in England, 361,000 in Scotland, 194,000 in Wales, 139,000 in Northern Ireland | start of 2025 | Department for Business and Trade |
| Company insolvencies in Scotland | 73 (Insolvency rate 48.5 per 10,000 companies in the 12 months to August 2026.) | August 2026 | The Insolvency Service |
| Company insolvencies in Northern Ireland | 7 (Insolvency rate 40.5 per 10,000 companies in the 12 months to August 2026.) | August 2026 | The Insolvency Service |
| GGS drawn value by nation | Scotland £217.73m (1,387 facilities); Wales £138.99m (912); Northern Ireland £55.89m (269); London £702.87m (3,667) | as at 30 June 2026 | British Business Bank |
| SME employers using external finance by nation | Northern Ireland 74%, Scotland 71%, Wales 70%, England 70% | 2025 | Department for Business and Trade |
| Nations and Regions Investment Fund sizes | Northern Powerhouse £660 million; Midlands £400 million; South West £200 million; Scotland £150 million; Wales £130 million; Northern Ireland around £100 million (As described on the fund pages.) | current fund sizes | British Business Bank |
How are these figures compiled?
Every figure is copied exactly as its source publishes it, with the period it covers, and was checked on 15 October 2026. We do not calculate, combine or estimate figures. Where two official sources measure the same thing differently (for example, the British Business Bank and the Bank of England on outstanding SME lending), both are shown. The full list of sources is at the foot of the page.
- The Bank of England, Insolvency Service and Companies House figures update monthly or quarterly; we refresh this page each quarter.
- The business population estimates for the start of 2026 are due on 5 November 2026.
- The approval rate is the SME Finance Monitor figure as reported by the British Business Bank.
Can I use these statistics?
Yes. Please cite the original source shown against each figure, and link to this page if it helped you find them ("UK SME finance statistics, Capzy, checked 15 October 2026"). Capzy is a UK business-finance broker; this page is general information, not financial advice.
Sources
- Business population estimates for the UK and regions 2025: statistical release, Department for Business and Trade
- Money and Credit - August 2026, Bank of England
- Money and Credit - August 2026, summary tables (Tables G and H), Bank of England
- Small Business Finance Markets Report 2026, British Business Bank
- Business Finance Review 2026 Q2, UK Finance
- Longitudinal Small Business Survey 2025: SME employers (businesses with 1 to 249 employees), Department for Business and Trade
- Business Finance Survey 2025 (SME Finance Survey) results, British Business Bank
- Asset finance new business grew by 2% in July 2026, Finance & Leasing Association
- GGS (including RLS iteration 3) performance data as at 30 June 2026, British Business Bank
- Start Up Loans homepage, British Business Bank (Start Up Loans)
- Impact Report 2026, British Business Bank
- Evaluation of the Nations and Regions Investment Funds: Early Assessment, British Business Bank
- Large businesses' payment practices and performance statistics 2025: commentary, Department for Business and Trade
- Commentary - Company Insolvency Statistics August 2026, The Insolvency Service
- Incorporated companies in the UK: April to June 2026, Companies House
- Companies register activities: statistical release April 2025 to March 2026, Companies House
- Business demography, quarterly, UK: April to June 2026, Office for National Statistics
- Nations and Regions Investment Funds, British Business Bank
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