How Much Finance Do UK SMEs Really Need? Typical Loan Sizes by Sector

Most UK SMEs do not borrow huge sums, but "typical" depends on what you mean by finance, and which sector you are in.

Here are three useful anchors from the latest major datasets:

• Among SMEs using external finance, 74% owed up to £25,000 in total in 2024 (across relevant finance types). Source: SME Finance Monitor (full report)
• When SMEs reported a specific funding need, the most common amount was £10,000 to £24,999 (chosen by 32% of those with a need in 2024).
• For bigger working-capital products, the average SME using invoice finance and asset-based lending was utilising £454,000 at September 2024. Source: UK Finance, Business Finance Review 2024 Q3

What "typical loan size" means for a UK SME in 2026

People search for "typical loan size" when they are trying to benchmark what is normal. In practice, UK SME finance falls into three different buckets:

• Outstanding borrowing, what a business owes right now.
• Funding needed, what a business says it needs for a specific purpose, like working capital or investment.
• Facility-based finance, like overdrafts and invoice finance, where the limit and the amount used can be very different.

In 2026, this distinction matters because more SMEs are planning and comparing options across banks, challenger banks, and specialist lenders. If you compare the wrong measures, you can overestimate, or underestimate, what you "should" be borrowing.

Typical outstanding borrowing among SMEs using finance

The SME Finance Monitor reports how much SMEs owed in total (for relevant external finance users, excluding those only using grants and/or director loans/equity).

For 2024, the distribution for finance users shows a strong skew towards smaller balances:

• 35% owed up to £5,000
• 20% owed £5,000 to £10,000
• 19% owed £10,000 to £25,000
• 13% owed £25,000 to £50,000
• 6% owed £50,000 to £100,000
• 7% owed £100,000+

That is why the headline is so consistent: in 2024, 74% of these finance users owed up to £25,000, and 26% owed more than £25,000 (a useful "small vs larger borrowing" split).

Typical loan sizes by sector: who is more likely to have £25k+ outstanding?

If you want a quick sector benchmark, the cleanest comparable measure in the SME Finance Monitor is the share of finance-using SMEs with £25,000+ outstanding.

For 2024 (finance users), the sectors more likely to have £25k+ outstanding were:

• Hotels & Restaurants: 37%
• Agriculture: 36%
• Wholesale/Retail: 31%
• Transport: 29%
• Manufacturing: 29%
• Construction: 26%
• Property/Business Services: 22%
• Other: 18%
• Health: 16%

This does not mean every business in those sectors borrows large sums. It means that within each sector's finance users, a higher share carries borrowing above £25k, which is often a working-capital and timing issue as much as it is a growth choice.

Why sector differences show up so clearly

The pattern is broadly consistent with how cash moves through different business models:

• Hospitality often faces volatile demand and seasonal cash flow.
• Agriculture can have lumpy costs and longer cycles.
• Wholesale, retail, and transport can be inventory and receivables heavy, which pushes some firms towards larger working-capital needs.

When "typical" jumps: invoice finance and asset-based lending

Some sectors will regularly outgrow small term loans and overdrafts, especially when sales are tied up in invoices or stock. This is where invoice finance and asset-based lending (IF/ABL) often becomes relevant.

UK Finance reported that at September 2024, SMEs using IF/ABL were utilising an average of £454,000 through their facilities. It also shows facility sizes differ sharply by turnover band, ranging from the smallest turnover cohort at the bottom of the chart to the largest cohort near the top. UK Finance, Business Finance Review 2024 Q3

The British Business Bank's market analysis also reports rising average advances in IF/ABL in 2024, with a quarterly average of £263,416 across Q1 to Q3 2024, up compared with the same period in 2023. British Business Bank, Small Business Finance Markets 2024/25

For 2026 planning, this matters because it tells you there are really two "typical" worlds:

• Most SMEs with borrowing still sit under £25k outstanding.
• A smaller group, often with receivables-based working capital, can run facilities in the hundreds of thousands.

How much finance do SMEs say they need when a funding need appears?

The SME Finance Monitor also asks SMEs with a funding need how much finance they required to meet it (excluding those who could not say how much they wanted).

For 2024, across SMEs with a need for funding:

• 15% needed less than £5,000
• 15% needed £5,000 to £9,999
• 32% needed £10,000 to £24,999
• 29% needed £25,000 to £99,999
• 8% needed £100,000 to £999,999
• 1% needed £1 million+

Size matters a lot here. In 2024, 76% of SMEs with 10 to 249 employees who had a funding need were looking for £25,000 or more, versus 36% of those with 0 to 9 employees.

What this means for SMEs comparing finance in 2026

If you are benchmarking your plan for 2026, use this simple approach:

1) Pick the benchmark that matches your situation

• If you already borrow, compare yourself to the amount owed distribution.
• If you are planning a new facility, compare yourself to the funding need bands.
• If you are funding receivables or stock, compare yourself to facility-based products like IF/ABL.

2) Use your sector as a "risk check", not a target

If you are in hotels and restaurants, agriculture, wholesale/retail, transport, or manufacturing, the data suggests you are more likely than average to end up above £25k outstanding once you use external finance. That can be normal for the model, but it is a flag to plan repayment headroom and cash buffers.

3) Expect the market to keep shifting towards selective borrowing

The British Business Bank reports that the share of smaller businesses using finance fell to 43% in Q2 2024 and stayed there in Q3 2024, even while gross lending held up in nominal terms. This mix can be consistent with a world where fewer firms borrow, but those who do may take larger, more structured facilities to support investment and working capital.

Sector demand is not static, UK Finance signals visible differences

UK Finance's Business Finance Review notes that gross lending to SMEs by the main retail banks rose to nearly £4.6 billion in Q1 2025, up nearly 14% on the same quarter a year earlier, and it also highlights that differences across sectors remain visible. UK Finance, Business Finance Review 2025 Q1

For 2026 searchers, the practical takeaway is simple: your "typical" loan size will be shaped as much by your sector's cash cycle as it is by your ambition. Use the bands and thresholds above to sanity-check your plan, then build the facility around what you need the money for.

Conclusion

• For many SMEs, "typical borrowing" is still small, in 2024 most finance users owed up to £25k.
• Sector differences are real, hotels and restaurants and agriculture had the highest shares of finance users owing £25k+ in 2024.
• Once you move into working-capital facilities like IF/ABL, "typical" can jump into the hundreds of thousands for the SMEs that use them.