SME Lending Is Rising Again — What South East Business Owners Need to Know in 2025
- sjohnston90
- Aug 26
- 2 min read
UK Finance reports that High Street banks increased lending to SMEs by 30% in Q1 2025, the highest since mid-2022.
That sounds like a positive headline. But if you’re a business owner in SW London, Surrey, Kent, Hampshire, or Sussex, the reality is more nuanced.
Yes, lending is on the rise — but it’s still 20% below pre-Covid levels, and not every SME will find the doors suddenly wide open.
What the Numbers Say
£4.6bn was lent to SMEs in Q1 2025
That’s a 30% year-on-year increase
But lending volumes are still lower than in 2019
For many South East businesses, this means cautious optimism — but also continued barriers if you’re outside the “low-risk” profile.
SME Finance South East: What This Means for Business Owners
1️⃣ More Appetite for Lending
Some sectors will find borrowing easier — especially those with strong assets or consistent turnover.
2️⃣ Blind Spots Remain
Banks are still cautious with industries they view as “high risk” (like hospitality and construction), and with younger businesses under three years old.
3️⃣ Timing Matters
When the market loosens, demand spikes. Those who prepare early and present a strong case often secure the best terms.
SME Finance Opportunities and Risks in 2025
✔️ Opportunities:
Invoice finance to improve cash flow
Asset finance for vehicles/equipment
Working capital loans for seasonal gaps
Commercial mortgages for owner-occupiers
❌ Risks:
Assuming “finance is easy again” when many SMEs still face delays or rejections
Wasting time on applications that were never a good fit
Real-World Examples
A Kent consultancy needed £90,000 to cover staff costs while waiting on invoices. Their bank offered no solution. Using independent SME finance, they accessed invoice funding and reinvested in growth.
A Hampshire logistics company secured working capital through a specialist lender — enabling them to win a national distribution contract.
FAQ: Business Owner Finance Advice in 2025
Q: Is SME lending really back to normal?
Not yet. Volumes are up 30% but remain below pre-Covid levels. Access is improving, but banks remain selective.
Q: What types of SME finance are available?
Invoice finance, asset finance, working capital loans, and commercial mortgages are all common routes.
Q: Do newer businesses stand a chance?
Yes — but often through alternative funders, not traditional High Street banks.
The Takeaway
SME lending is rising which is good news. But for South East business owners, the system still isn’t straightforward.
The best outcomes come from:
Presenting your financials clearly
Targeting lenders who understand your sector
Planning early, before you need the funds urgently
👉 no jargon, no obligation, just clarity.
We’ll:
Sense-check your funding requirements
Identify which types of SME finance may suit you
Save you time and stress by targeting the right lenders
👉 You may also like: Why Your Bank Might Be Slowing Down Your Business
Disclaimer: This article is for information purposes only and does not constitute financial advice. Lending is subject to status and affordability. Stuart Johnston is an Appointed Representative of Kingston Finance Ltd, authorised and regulated by the Financial Conduct Authority.
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