UK corporate lending builds momentum as sentiment strengthens

While the headlines might have you reaching for a stress ball, the numbers tell a much brighter story—UK businesses are borrowing, investing, and getting ready for growth. “The trend of growing corporate lending has definitely continued in recent months, with December Bank of England figures showing solid growth in non financial corporate lending,” says Richard Lewis, Head of Corporate Banking Origination, HSBC UK.

In 2025, UK non financial businesses borrowed £30.9 billion net¹, a significant increase on the £9.5 billion net borrowing in 2024, part of a broad-based momentum that is picking up across the sector, with large corporates remaining active, and a notable upward trend in borrowing among smaller firms. “Alongside healthy corporate lending growth, SME lending continues to increase as well, with positive growth every month since February 2025,” says Lewis.

The annual growth rate of SME borrowing rose to 2.2% in December 2025, the highest since July 2021². This growth spans several sectors, including real estate, professional services, education, infrastructure and technology. Overall, this activity paints a picture of a more resilient trading environment than external sentiment might suggest.

Corporate investment trends remain steady, supported by ongoing digitalisation and ONS data to September 2025 showing a 2.7% year on year rise in capital investment³.

“Spending has been very IT heavy as companies digitise and automate, but we’re increasingly seeing manufacturing and equipment investment coming through as well,” says Lewis.

Survey feedback supports this, with Deloitte’s CFO Survey for Q4 2025 highlighting strong commitments to digital, AI and productivity, alongside rising confidence around risk appetite – reflecting a shift in priorities for 2026⁴. “This demonstrates that companies are beginning to transition from resilience to readiness, and are positioning for growth in 2026,” says Lewis.

Despite mixed media sentiment, business fundamentals remain stable. “We’re not seeing the pessimism that you see in some quarters reflected on the ground,” says Lewis. “Corporate earnings are still very positive, and lower interest rates, competitive lending appetite and modest GDP improvements have created a more conducive borrowing environment.”

Lewis also highlights a growing competitiveness among lenders. “Banks are being very competitive, and both UK and international banks are keen to lend to solid UK corporates,” he says. This backdrop is supporting increased refinancing, capital expenditure and strategic repositioning.

HSBC UK’s model continues to resonate with businesses seeking strategic support. The bank’s international reach remains a major advantage. “Our ability to support clients internationally while also offering strong domestic support within the UK is a major strength as a bank,” says Lewis. “That combination of global connectivity with local, on the ground support is a real differentiator for HSBC UK.”

The bank’s blend of local presence and national expertise also provides stronger client support. “One of our key strengths is our regional offering, which is supplemented by national experts and sector specialists,” he explains. This enables teams to proactively connect clients with fresh ideas– from M&A insights to debt capacity views and alternative financing options.

HSBC UK’s relationship led approach also continues to resonate strongly with clients, particularly when it comes to the way the bank delivers decisions and supports businesses with clarity and consistency. “Consistency really matters to our clients,” says Lewis. “We pride ourselves on getting back quickly with a yes or a no — and if we say we can do something, we tend to do it.

“That reliability is a big part of why HSBC UK has been the number one UK loans bank for 11 consecutive years, and why a Savanta survey⁵ found that more corporates would consider HSBC than any other.”

As confidence gradually rebuilds across the market, many businesses are beginning to re engage with the strategic ambitions they had paused during periods of recent uncertainty. “That shift is becoming increasingly visible in the rise of M&A discussions, with several significant transactions already in motion, says Lewis. “Companies are increasingly thinking about offensive rather than defensive strategies,” he adds.

Government backed schemes such as UK Export Finance (UKEF) and the Growth Guarantee Scheme are gaining traction, giving businesses additional pathways to secure investment. HSBC UK is supporting an £11 billion UKEF fund aimed at boosting lending for small businesses and have partnered with UKEF to deliver a multi billion GBP pledge that takes total lending for UK exporters up to £3bn — to help SMEs seize international growth opportunities. As of 30 September 2025, take up under the Growth Guarantee Scheme has delivered 17,457 facilities delivered and £2.89bn of financing to smaller UK businesses⁶.

“People are really starting to understand and use these schemes,” says Lewis. “What we’re seeing now is a meaningful shift in how businesses are approaching the future,” he explains. “There’s a growing sense that companies want to move forward with confidence, make decisions, and take advantage of the opportunities emerging across the UK economy,” Lewis concludes.

“In that kind of environment, having the right banking partner really matters — one that can offer clarity, ideas and a balanced perspective. Our role is to help clients navigate that shift and back their ambitions with the support they need to move at pace.”