UK businesses are continuing to turn to finance to support investment, growth and day-to-day cash flow, with the latest figures showing an increase in borrowing during July.

According to the latest Bank of England Money and Credit data, UK non-financial businesses borrowed a net £1.8 billion from banks and building societies during July 2026. Small and medium-sized businesses accounted for approximately £0.8 billion of that borrowing, up from £0.7 billion in June.

SMEs Continue to Access Finance

The latest figures suggest that demand for business funding remains active across the UK.

For many businesses, external finance can provide the additional capital needed to purchase equipment, invest in vehicles, increase stock levels, improve cash flow or fund expansion without placing unnecessary pressure on existing working capital.

Annual SME borrowing growth remained at 4.1% in July, according to the Bank of England.

The Cost of Borrowing Has Increased

While businesses continue to borrow, funding costs remain an important consideration.

The effective interest rate on new SME bank loans increased from 6.36% in June to 6.61% in July. The rate on new loans across UK non-financial businesses increased to 5.62%.

That makes comparing different finance structures particularly important. The lowest headline rate isn’t necessarily the only consideration; repayment structure, term, security requirements and flexibility can all affect whether a particular facility is suitable for a business.

What Does This Mean for UK Businesses?

Businesses considering investment don’t necessarily need to rely entirely on existing cash reserves.

Depending on the circumstances, funding options can include business loans, asset finance, invoice finance, working capital facilities, vehicle finance and other specialist commercial finance products.

Different lenders have different criteria and appetites for lending, which is one reason businesses may benefit from exploring more than one funding option.

Finding the Right Business Finance

At MoneyWow, we help UK businesses explore finance options from our panel of lenders.

Whether you’re looking to invest in equipment, strengthen cash flow, purchase vehicles or fund the next stage of your business growth, we’ll help you explore suitable funding options based on your requirements.

Looking for business finance? Explore your options with MoneyWow today.

Source: Bank of England, Money and Credit – July 2026.