Experian UK Business Credit Trends Index: Q1 2025

An overview of the macroeconomic outlook and SME credit trends

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Navigating uncertainty: Lenders and SMEs find stability amid economic shifts

Despite ongoing trade tensions, rising taxes, and inflationary pressures, UK businesses are showing continued resilience in early 2025. As we enter Q2, small and medium-sized enterprises (SMEs) remain confident in seeking credit, and lenders are increasingly willing to meet that demand.

Lending volumes have held steady, and the value of loans has surged – driven especially by growth in commercial mortgage lending. This signals a cautious but growing comfort among traditional lenders, particularly toward lower-risk clients. This comes even as broader economic uncertainty overshadows positive news, such as a stronger-than-expected GDP growth of 0.7% in Q1.

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In this report, we cover:

SME credit trends to watch
We look at demand and supply, the role of alternative lenders, and credit performance highlights.
Macroeconomic outlook
How economic trends are shaping SME resilience.
SME demands
How demand for credit is reflected into lending and SME delinquency rates.

A sneak peek into...

Experian UK Small and Medium-Sized Enterprise (SME) Credit Trends Index

John Griffiths, Market Engagement Director, Experian

Foreword

Lenders and businesses carve out comfort zones in a rocky economic landscape

Trade tensions, taxation, inflation – the economic terrain is looking uncomfortable for UK businesses this year. As we step into an uncertain Q2 2025, what is clear is that SMEs are confident about applying for credit and lenders are increasingly comfortable providing it to them.

Over the first quarter, we’ve seen a surge in the value of loans to SMEs, and the volume of lending has remained stable. The data suggests traditional lenders are getting more comfortable in the rocky economic climate – even if that means favouring existing lower-risk customers.

It comes at a time when anxiety over looming challenges is ‘Trumping’ good news about better-than-expected growth. Q1 ended with the announcement that GDP had grown more than previously thought in 2024 – revised up to 1.1% from the initial estimate of 0.9%. And February brought a bumper 0.5% increase in GDP, following a 0.1% decline in December and static January. Overall, GDP growth was 0.7% across Q1.