As we start 2026, we thought it was time to look back on 2025 to uncover the most interesting business finance stats from the last 12 months.
We’ve analysed thousands of loan applications through our platform this last year, so what does it tell us? Our data gives us a glimpse into both the financial challenges and ambitions of UK businesses.
2025 at a glance
Before diving into the details, here are the headline commercial loan statistics for the year:
- £322,131,874 was requested in 2025
- The most common loan amount requested was £10,000
- The average business annual turnover was £100,000
- Two years was the most popular loan term
- Business owners in construction sought finance over other sectors
- The most common reason for finance was cash flow
Short-term flexibility is the priority
In 2025, business owners moved away from long-term debt commitments, showing a clear preference for short-term flexibility.
Although demand for five-year term loans dropped to 14.5% (down from 17% in 2024), we saw a significant increase in requests for one and two-year terms. Together, these shorter terms accounted for nearly 52% of all our applications.
This shift suggests business owners might be a little cautious about taking on longer-term debt. Preferring short-term business loans. Short-term loans help bridge gaps or help you fund specific projects without feeling tied into a debt repayment plan that can last many years.
Preferred Business Loan Terms in 2025
🏆 A 2 year term was the most popular choice for businesses
Source: capalona.co.uk
Funding requests on the platform were widespread, with £10,000 emerging as the most commonly requested amount. This mirrors 2024’s figures and highlights the ongoing strong demand for smaller loans.
Top Loan Amount Requested in 2025
🏆 £10,000 was the most requested loan amount by businesses
Source: capalona.co.uk
Cash flow remains king
So, why are businesses borrowing? Unsurprisingly, managing cash flow remained the number one reason, accounting for 48.1% of all applications. That’s a notable jump from 43% in 2024.
Growth and expansion remained a strong second priority (24.2%), proving that despite economic pressures, UK SMEs are still looking to scale. Which is great news for anyone considering starting a business in 2026.
Interestingly, transport vehicles had a place in the top five reasons for finance (3.5%). This highlights a growing need for asset finance as businesses upgrade their fleets or logistics capabilities.
Top 5 Business Funding Reasons in 2025
🏆 Cash Flow was the leading funding purpose for businesses
Source: capalona.co.uk
The need for speed
When it comes down to it, businesses can’t afford to wait for funding. In 2025, 92% of applicants needed funding "as soon as possible."
It’s time-sensitive situations like urgently needing to pay an unexpected bill or cover unscheduled maintenance costs where alternative business finance providers can come out on top. With traditional bank loans, small business owners are left waiting weeks for their applications to be processed, whereas alternative lenders can offer unsecured business loans in as little as 24 hours.
The Urgency of Business Funding in 2025
🏆 Businesses wanted funding as soon as possible
Source: capalona.co.uk
Who’s applying?
Construction retained the top spot as the most active sector seeking finance (12%), followed closely by retail (9.6%). Which isn’t surprising, as construction faces upfront costs for raw materials long before the project is completed and the invoice is sent and paid.
We’ve also seen a shift in the hospitality sector. While 'restaurants/pubs' held its position, food service entered the top five for the first time, replacing e-commerce.
Top 5 Business Sectors in 2025
🏆 Construction was the top industry for finance applications
Source: capalona.co.uk
More interesting stats:
- Business Structure: Limited companies continue to dominate the applicant pool (79%), with sole traders making up 20%, and partnerships just 1%.
- Company trading time: The majority (18%) of 2025 applicants were trading for 1-2 years.
- Location: London remains the hub for business finance applications, with Manchester and Birmingham following as key regional hotspots.
How businesses feel about personal guarantees
A majority of applicants (58.1%) said they would be willing to provide a personal guarantee when seeking finance, while 41.9% were not comfortable with the idea. These results closely mirror the findings from 2024, suggesting attitudes have remained largely unchanged.
Did Businesses Consider a Personal Guarantee in 2025?
🏆 58.1% of business owners were willing to provide a PG
Source: capalona.co.uk
The rise of the digital toolkit
The tools businesses use to manage their money have remained largely the same since 2024. Although Monzo remains in first place for business bank account of choice at 16% (up from 12.3% in 2024), Barclays has risen from third place to second. Is this the high street improving its digital offering and fighting back?
Although Barclays did rise, there are still three challenger banks alongside two high street giants. So the weighting is the same, showing business owners have unyielding trust in the newcomers for business dealings.
Interestingly, Starling Bank dropped out of the top five altogether since the 2024 business finance rankings, with Revolut taking 8.3% instead.
Top 5 Most Popular Business Bank Accounts in 2025
🏆 Monzo ranked as the most popular business bank account for those seeking finance
Monzo
Barclays
Tide
Lloyds
Revolut
Source: capalona.co.uk
For accounting, Xero cemented its lead, being used by nearly 37% of applicants, with QuickBooks taking second place with 22.9% of applicants.
Top 5 Most Popular Accounting Software in 2025
🏆 Xero emerged as the most widely used accounting software among our applicants.
Xero
QuickBooks
FreeAgent
Sage
ClearBooks
Source: capalona.co.uk
Looking ahead
From the data, it seems business owners are borrowing smarter by opting for shorter terms to manage cash flow and acting quickly on growth opportunities.
If you’re looking to fund your business goals in 2026, we can help you find and compare eligible lenders instantly with our free business loan comparison tool. It’s quick, easy, and doesn’t affect your credit score!
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