The UK’s SME lending landscape in 2025 carries forward both promise and caution. According to the Small Business Finance Markets Report 2025, the value of finance flowing to smaller businesses in 2024 edged upward, even while fewer businesses reported using external finance.
Challenger and specialist banks now command approximately 60% of gross lending to SMEs, outstripping the big high-street names. Meanwhile, in Q1 2025, high street banks lent £4.6 billion to businesses, marking the sixth consecutive quarterly increase and hitting the highest quarterly total since 2022.
That said, the broader access picture is mixed. The British Business Bank report points out that fewer smaller businesses are turning to external finance: the proportion using it dipped in 2024 compared to earlier years. Many cite cost, risk, or complexity as deterrents.
From Spark Finance’s vantage, this underscores that growth in lending volumes does not necessarily mean universal access, many SMEs remain at the margins of the credit market. As this series unfolds, we’ll dive deeper into segments, frictions, and tactical insights for both lenders and borrowers navigating this environment.
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.
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