Forecast: New Business Lending for SMEs in the UK

From 2013 to 2019, the new business lending for SMEs in the UK showed moderate growth, peaking at £59.2 billion in 2016. However, the lending value declined slightly in 2017 and 2019 before experiencing a substantial spike in 2020, increasing by 84.36% to £104.9 billion, likely due to pandemic-related financial support measures. The value then normalized in 2021, decreased significantly, and began to recover in 2022 with a 33.58% increase. As of 2023, the lending value stood at £80.43 billion, showing a slight year-on-year increase of 4.36%. The 5-year CAGR leading up to 2023 was 6.83%.

Looking ahead, the forecasted data suggests steady growth in new business lending for SMEs, with an expected CAGR of 2.92% from 2024 to 2028, resulting in a projected lending value of £96.72 billion by the end of 2028, indicating an overall growth rate of 15.48% over this period.

Future trends to watch for:

• Impact of post-Brexit economic policies on SME lending.
• Potential effects of rising interest rates on borrowing costs.
• Emerging trends in digital lending and fintech innovations.
• Government support initiatives and their influence on SME financing.