Find out which areas of the UK that are borrowing the most with Think Business Loans.
Find out which areas of the UK that are borrowing the most with Think Business Loans.
New data from Think Business Loans has revealed that the amount of money businesses have borrowed has shot up in recent years.
Think Business Loans used customer data to discover which areas of the UK secured the most loans and which were the most popular across the regions. The data also reveals how the amount spent on loans has changed over the last six years and which industries spent the most on business loans in 2022.
Business loans are one of the first options businesses look toward to raise funds to grow or expand.
These loans are specifically intended for business purposes, where you’ll be lent a sum of money over a period of time, and the interest rate and monthly repayments can be fixed over the term.
The six most common business loans are:
The South East of England recorded the highest number of short-term loans taken out by businesses. How does your region measure up?
Region | Total Loans | Most Popular Loan |
South East | 268 | Short Term |
West Midlands | 72 | Short Term |
South West | 71 | Short Term |
North West | 66 | Short Term |
East England | 65 | Short Term |
East Midlands | 61 | Short Term |
Yorkshire | 52 | Term & Short Term |
London | 37 | Short Term |
Scotland | 54 | Short Term |
Wales | 44 | Short Term |
With quicker approval times, it’s no wonder short-term loans were overwhelmingly the most common type of business loan for every UK region in 2021, with the South East coming out on top with 268 loans in total. It could be that the pandemic meant many businesses were in need of a quick loan to cover emergency costs.
From the 837 loans analysed, a staggering 65% (539) of businesses chose a short-term loan as their finance solution.
The research also revealed that London only accounted for 37 loans in total, despite the high number of start-up companies in the capital. The increased number of loans in the South East could indicate a shift of new businesses looking for opportunities elsewhere away from the capital.
The least popular type of loans taken out across the regions was IF (13) and secured loans (15). Since secure loans require collateral — such as commercial property — that can be claimed should businesses fail to repay loans, it’s no surprise that this is one of the least popular loan types.
Due to the uncertainty caused by the Covid-19 pandemic, this could suggest that businesses may have been unwilling to potentially lose valuable assets if the loan couldn’t be paid back. Although interest rates of secured loans are usually lower because they are less risky to the investor, there is potentially more to lose for the borrower.
The same can be said for asset-based loans, through which physical assets are used as security and can be seized without payment. Only 41 asset-based loans were taken out in total, making this the 3rd least-common type of loan overall.
Overall, the amount businesses are borrowing has increased over the past 6 years, with spending rising steadily from 2017 and jumping significantly in 2020 and 2021.
The research revealed that the highest borrowing figures seen overall were in 2020. No doubt, this is a direct result of the pandemic, as businesses were in need of loans to support cash flow in a time of economic uncertainty. London was the region borrowing the most during this time, with companies borrowing an astounding £1,393,574,506 in total.
In comparison, 2022 saw borrowing numbers fall significantly for the first time since 2018, with Wales and Scotland cutting spending by around 50%.
Between 2019 and 2020, Yorkshire and the Humber saw borrowing jump by a huge £3,162,946 before rising to a further £7,087,003 in 2021. Interestingly, the region has scaled back the figure stupendously to just £160,000 for 2022.
The North West is the only region that didn’t have a majorly significant borrowing jump, steadily increasing from £2,259,691.00 in 2019 to £3,601,260.00 in 2022.
The construction industry borrowed the most money. Did your industry make the list?
Ranking | Industry | Amount Loaned |
1 | Construction | £70,695,918.00 |
2 | Wholesale and retail trade; repair of motor vehicles and motorcycles | £54,949,875.00 |
3 | Administrative and support service activities | £32,996,981.00 |
4 | Manufacturing | £29,239,126.00 |
5 | Professional, scientific and technical activities | £27,822,544.00 |
6 | Accommodation and food service activities | £23,510,611.00 |
7 | Real estate activities | £21,627,625.00 |
8 | Information and communication | £14,140,400.00 |
9 | Human health and social work activities | £12,688,037.00 |
10 | Other service activities | £9,789,340.00 |
11 | Transportation and storage | £7,694,296.00 |
12 | Electricity, gas, steam and air conditioning supply | £5,579,463.00 |
13 | Arts, entertainment and recreation | £4,140,514.00 |
14 | Activities of households as employers; undifferentiated goods-and services-producing activities of households for own use | £3,929,098.00 |
15 | Education | £3,905,778.00 |
16 | Water supply; sewerage, waste management and remediation activities | £1,755,847.00 |
17 | Financial and insurance activities | £1,579,703.00 |
18 | Agriculture, forestry and fishing | £947,386.00 |
19 | Mining and quarrying | £545,000.00 |
20 | Activities of extraterritorial organisations and bodies | £50,000.00 |
Overall, construction was the industry that borrowed the most in business loans. Considering this industry has encountered many problems lately, including labour shortages and supply chain issues caused by the pandemic and Brexit, it’s no surprise that it was the highest by a far margin.
In comparison, wholesale and retail trade (repair of motor vehicles and motorcycles) was the 2nd highest spending industry. Due to the pandemic, this industry was completely decimated, and car production fell by 45% compared to pre-pandemic levels and in August 2021, a global chip storage severely impacted car sales around the world.
Administrative and support services activities saw the third-highest borrowing numbers. This could be thanks to flexible working patterns meaning fewer people are working in offices, and subsequently, there’s less need for administrative support.
There are a number of reasons why businesses choose to borrow. Sometimes it’s because an unexpected expense has cropped up, other times it’s because they need to purchase a new piece of equipment.
Think Business Loans data showed that borrowing was at an all-time high in 2020 as new lockdown businesses exploded, with a significant increase per region in 2021.
When it comes to scaling up, there are now more options than ever to help your business thrive in ways it may not have before.
In response to the data gathered for this research, Think Business have put together some advice that businesses should consider when deciding whether to borrow.
“Asset-based lending allows businesses to grow by acquiring equipment and machinery — and then use this as a form of security to ensure a business's repayments,” says Jamie Stewart, Managing Director at Think Business Loans. "Without some form of lending, it’s hard for businesses to even get off the ground.”
The headline finding from this survey is that businesses are roughly borrowing more and more every year — with help from the Covid-19 pandemic.
If your business needs a leg up, then the team at Think Business Loans can help. Compare all of your loan options — including Asset Finance, Secured and Unsecured Loans — and find finance that fits.
Every business is unique, so we first need some basic info on your business so we can find finance to fit your needs and circumstances. Our cutting-edge iFunds technology will match your business against the suitable loans and lenders.
We put your application to tender with our panel of lenders to find the most suitable solution. An account manager will then talk you through your options and you can track the progress of your application via our smartphone app.
Once you’ve chosen the loan you want, we’ll handle all correspondence and information requests. Your account manager will be on hand to answer questions, give you regular updates and make sure you get your funds as soon as possible.
If you take out a loan, we may receive a commission from the lender, which is included in the rates we quote.