"High street banks continue to prioritise low-risk lending, while unsecured facilities are frequently capped, short-term or priced aggressively. UK Finance data shows that approval rates for unsecured SME lending remain below pre-2020 levels, while demand for asset-backed finance has steadily increased. Businesses are adapting by looking at what they already own, property, equipment, vehicles, or receivables, and using those assets more strategically."
"Secured Business loans often allow for longer terms, lower interest rates and higher borrowing limits. For firms with tangible assets, that trade-off is becoming easier to justify. This shift is less about desperation and more about pragmatism."
"Research from Deloitte indicates that SMEs using asset-backed lending for growth projects report more predictable repayment profiles than those relying solely on revolving credit. Predictability matters when costs are rising elsewhere."
UK businesses face constrained growth due to limited access to affordable capital, with margins under pressure and traditional lenders reluctant to move quickly. Secured lending is regaining prominence as a disciplined approach to unlock capital while maintaining operational stability. High street banks prioritize low-risk lending while unsecured facilities remain capped or expensive. UK Finance data shows unsecured SME lending approvals remain below pre-2020 levels, while asset-backed finance demand increases. Businesses strategically leverage existing assets—property, equipment, vehicles, receivables—to access longer terms, lower rates, and higher borrowing limits. Secured loans function as forward-planning tools for expansion and acquisitions, not distress signals, with research indicating SMEs using asset-backed lending report more predictable repayment profiles than those relying on revolving credit.
Read at London Business News | Londonlovesbusiness.com
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