Research / Market Reports

UK Business Borrowing Index 2026

Key Findings

• iOverall SME lending conditions are stable in Q2 2026, with lender appetite broadly unchanged from Q1
• iAsset finance approval rates remain the strongest of any product category at approximately 72%
• iBridging loan decisions are being made faster in Q2 2026, with average time-to-offer falling to 48 hours on straightforward residential deals
• iInvoice finance demand is rising, driven by businesses seeking to manage cash flow amid continued late-payment pressures
• iUnsecured loan approval rates have stabilised at 58-62% after tightening in 2024
• iTrade finance demand from manufacturing and wholesale businesses has increased as supply chains stabilise

Lending conditions by product (Q2 2026)

Asset finance continues to show the strongest lending conditions of any SME product category. Lender appetite for well-maintained commercial vehicles, plant, and machinery remains robust across most sectors. Approval rates of approximately 72% reflect the security value of the underlying asset, which reduces lender risk compared to unsecured products. Rates on prime asset finance (new vehicles or equipment, 2+ years trading, clean credit) have held relatively stable despite base rate pressure.

Invoice finance conditions are broadly positive for qualifying businesses. The combination of late payment pressure, cost inflation, and the need to fund growing order books has driven demand. Lenders are showing good appetite for established businesses with diversified debtor books. Concentration risk (one debtor representing more than 30% of invoiced turnover) remains the most common reason for declining invoice finance applications.

Unsecured business loan conditions have stabilised after a period of tightening. Approval rates of 58-62% reflect lenders' increased focus on profitability and debt serviceability. Strong recent bank statements continue to be the most influential factor in underwriting decisions. Businesses with three to six months of consistently positive trading are accessing unsecured finance more readily than those with volatile or declining turnover patterns.

Approval rates and decision speeds (Q2 2026)

Decision speeds have improved across most product categories in Q2 2026, driven by continued investment in automated underwriting technology by both traditional and fintech lenders. For sub-£100,000 unsecured loans with clean credit and good bank statements, same-day to next-day decisions are now routinely available. Larger or more complex facilities continue to require more thorough underwriting, with 5-10 working day decision timelines typical for amounts above £500,000.

Bridging loan decision speeds have improved notably. For straightforward residential first-charge deals with clear exits and prime security, lenders are increasingly competing on speed. Time-to-offer on qualifying deals has fallen to an average of 48 hours from initial application, with some lenders offering same-day indicative terms.

Methodology

The UK Business Borrowing Index is compiled from Spark Finance's own application and placement data across its broker panel of 250+ specialist lenders. Approval rates reflect applications submitted by Spark Finance during the quarter, not industry-wide data. They may differ from other sources due to self-selection effects and the profile of businesses that approach brokers. The index is updated quarterly.

Disclaimer: This index is produced by Spark Finance for informational purposes and does not constitute financial or investment advice. Spark Finance is a credit broker, not a lender. FCA Authorised, FRN 958123. Approval rates and conditions shown are based on applications processed through the Spark Finance broker panel and may not be representative of all lenders or all applications.

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