Credit pricing remains central to SME loan uptake. In November 2024, the effective interest rate on new loans to SMEs stood at 7.17%, a downward tick from previous months. In January 2025, that average rate was ~7.00% (a slight easing), the lowest since May 2023.
By July 2025, the effective rate on new SME loans fell further, to 6.41%. These shifts suggest that lenders are trying to respond to capital and funding conditions, but even ~6–7% rates are still materially higher than pre-pandemic norms.
The margin, or credit spread, over base or reference rates is where lender judgment kicks in: risk premia, term structure, and sectoral differentiation. SMEs whose margins are already tight may balk at such rates, deferring borrowing or using internal capital instead.
We expect that as rates moderate, credit volumes may rebound, but only if conversion friction and credit risk remain manageable.
As a founder of multiple businesses, Jamie believes that mindset, discipline and ambition are key drivers for success, both for his businesses and for his clients.
.png)
