The latest UK Finance Business Finance Review offers fresh insight into how UK small and medium-sized enterprises (SMEs) are managing finance and borrowing. While lending activity improved across 2024 — with a 13% year-on-year rise — businesses continue to repay more than they borrow, and the economic climate remains tense.
At Francis Wilks & Jones, these findings echo what we’re seeing day to day: SMEs are holding back from new borrowing due to tight cash flow, economic uncertainty, and persistent late payments from customers.
📊 SME Finance Overview – 2024 at a Glance
| Metric | 2024 | 2023 | Pre-COVID Average |
| Gross Lending to SMEs | £16.1 billion (↑13%) | £14.3 billion | £20–25 billion |
| Net Lending | Negative | Negative | Positive |
| Loan Approvals | 44,700 (↑23%) | 36,300 | ~50,000 |
| Overdraft Approvals | 58,800 (↑47%) | 40,000 | ~60,000 |
| IF/ABL Advances (end 2024) | £21.2 billion (↑4%) | £20.3 billion | N/A |
| SME Cash Deposits vs 2019 | +£10bn (still higher overall) | N/A | Baseline |
Source: UK Finance Business Finance Review Q4 2024
🧾 Key Takeaways from the Report
1. Borrowing is up — but so are repayments
SMEs borrowed more in 2024, but most of this was still to refinance pandemic debt. Many firms are reluctant to increase borrowing further due to margin pressures and rising operating costs.
2. Overdrafts are making a comeback
With traditional lending constrained, overdraft approvals rose by 47%. This suggests businesses are turning to flexible working capital tools to bridge short-term gaps.
3. Cash deposits remain uneven
While SMEs still hold more in deposits than pre-pandemic (around £10bn extra), the availability of liquidity varies widely by sector. Many smaller businesses are burning through reserves faster than they’re replenished.
4. Confidence Remains Fragile
GDP growth for Q4 2024 was just 0.1%, and net lending remains negative — meaning repayments continue to outweigh borrowing. This confirms a cautious SME sector prioritising survival over growth.
📉 The UK Economic Policy Uncertainty Index hit a record high in Jan 2025, reflecting concerns over inflation, regulation, and global trade friction.
💬 What this means for SME owners
For SMEs already juggling late-paying clients and rising costs, this report reinforces one key message:
⚠️ You can’t afford to ignore unpaid invoices. Every pound of bad debt reduces your borrowing power and drains your working capital buffer.
At Francis Wilks & Jones, we help clients recover what they’re owed before it spirals into bigger financial issues.
✅ How We Can Help
At Francis Wilks & Jones, we support business owners and finance directors in enforcing their payment terms and recovering overdue invoices. Our approach is commercial, firm, and effective — all while maintaining your business’s reputation and ongoing relationships.
✅ Letter before action
We issue persuasive, professional letters before action that often result in swift settlement.
✅ County court proceedings
When needed, we issue and manage county court claims from start to finish — and act fast to secure judgment.
✅ High court enforcement
For unpaid judgments, we escalate matters to enforcement using our panel of trusted High Court Enforcement Officers.
✅ Statutory demands
We issue statutory demands for undisputed debts over £750 — a strong tool to prompt payment or insolvency action.
✅ Winding up petitions
Used selectively, we file winding up petitions against corporate debtors to recover larger amounts and apply maximum pressure.
✅ Freezing injunctions and asset protection
We can act urgently to protect assets at risk of being moved or hidden by uncooperative debtors. We specialise in freezing order applications.
✅ Pursuit of personal guarantees
Where director guarantees exist, we take action to hold individuals liable, increasing leverage in negotiations.
✅ International debt recovery
With our international partners, we help clients recover debts across borders and enforce foreign court decisions.
✅ Interest and late payment compensation
We calculate and add compensation under the Late Payment of Commercial Debts Act, increasing the recoverable amount.
✅ High-volume recovery
For firms dealing with regular overdue accounts, our volume-based debt recovery services offer streamlined legal support and reporting.
Let us help you tighten your terms to reduce future risk and ensure your payment clauses are enforceable.
📌 Final Word
The UK Finance report shows a sector cautiously optimistic — but still financially strained. Don’t let overdue payments hold your business back in 2025.
📞 Speak to our team today
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