SME lending hits its highest level since the pandemic

Date: 22/06/2026

According to UK Finance SME lending has hit its highest level since the pandemic, rising 16% in the first quarter of 2026. This significant increase demonstrates the continued strong demand for SME finance and how much UK businesses depend on this support.

What is driving the rise in SME lending?

Companies are turning to SME lending for multiple reasons. Some businesses simply need extra cash to make sure their cash flow is stabilised. These businesses find that stabilising cash flow can reduce their money stress and make sure their financial status is secure.

Other businesses may use SME lending to fund expansion ideas. For example, renovations or new seating areas. Likewise, some businesses can use the finance to buy extra stock or equipment.

The rise in SME lending has also come at a time when many businesses are facing higher bills, inflationary pressure and rising operating costs. As running a business becomes more expensive, access to flexible finance can provide welcome support, helping owners manage day-to-day pressures while keeping their plans for growth on track.

Fewer barriers to finance – SMEs may find it easier to access funding through providers that specialise in supporting smaller businesses. Compared with some traditional finance routes, these options can offer a more flexible approach to eligibility, helping more businesses secure the support they need.
Quick and Simple – With SME lending such as cash advances available, funding is usually approved between 2-4 days from an application. This means business owners can quickly access extra cash to help their businesses out.
Low risk – SME lending is usually a low-risk way of getting some extra cash as taking lending out doesn’t affect your credit score. This is a good option for businesses who need fast funding and are comfortable with the repayment terms.
Lending works in line with your business – For business funding such as cash advances, these are repaid as a percentage of your income. This means when your income is higher you pay back more, and when your income is lower you pay back less.

Fewer barriers to finance – SMEs may find it easier to access funding through providers that specialise in supporting smaller businesses. Compared with some traditional finance routes, these options can offer a more flexible approach to eligibility, helping more businesses secure the support they need.
Quick and Simple – With SME lending such as cash advances available, funding is usually approved between 2-4 days from an application. This means business owners can quickly access extra cash to help their businesses out.
Low risk – SME lending is usually a low-risk way of getting some extra cash as taking lending out doesn’t affect your credit score. This is a good option for businesses who need fast funding and are comfortable with the repayment terms.
Lending works in line with your business – For business funding such as cash advances, these are repaid as a percentage of your income. This means when your income is higher you pay back more, and when your income is lower you pay back less.

What types of funding are SMEs using?

SMEs often get funding from government backed lending companies. UK Finance is calling for the government to deliver an expanded Growth Guarantee Scheme (GGS), designed to support and encourage small businesses to access finance.

The GGS provides lenders with a government guarantee which means lending companies can offer businesses better terms so that they can qualify for lending.

Without this, SMEs would struggle to qualify for standard lending. Therefore, as the demand is increasing, it has never been more important to get the government’s support to support SME lending.

What does rising SME lending mean for business growth?

The rise in SME lending means that businesses are looking to expand, grow, buy supplies or manage their cash flow.

Lending allows businesses to stabilise or expand meaning it is essential for business growth in the UK. Lending can prevent businesses from struggling or going under.

Therefore, lending can support UK businesses as a whole and make sure businesses are growing rather than closing.

What SME lending can you access as a Handepay customer?

As a Handepay customer, you can access SME lending through YouLend. YouLend provides quick access to a cash advance through a very simple application.

To find out more about Handepay’s partnership with YouLend: visit our business finance page here.
If you are interested in applying for a YouLend cash advance: follow the link to start an application here.

Available to existing Handepay merchants receiving acquiring services from an acquiring provider organised through Handepay who have not entered into any other agreement with third parties for the sale of their receivables. Eligibility criteria will apply. Business must be trading for 3 months or more, with a minimum of £3,000 in card transactions per month.

All Cash Advance applications are processed by the independent service provider, YouLend Limited. The cash advance is a sale of future card receivables, not a loan, and is not subject to the regulation and legal protections applicable to loans that are consumer credit or regulated mortgage contracts. Handepay’s activities in relation to the YouLend products do not constitute regulated credit broking.

Written by Barry Seamons

Created: 22/06/2026 - Updated: 22/06/2026

Over 20 years in Payments and Merchant Services, driving Growth and delivering Value to Merchant Partners with the backing of a trusted and reliable brand.

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