As we start a brand new year, we thought we’d round up all our interesting business finance statistics from 2024. So, if you’re itching to find out which types of businesses are seeking finance and the reasons they’re applying for finance in the first place, stay tuned!
Business loan statistic highlights:
- Applicants requested over £499,500,000 in funding in 2024
- The most common business loan amount was £10,000
- Mostly limited companies applied for finance
- Cash flow was the most common reason for business finance
- 91.2% of applicants required funding as soon as possible
- 58.5% of business owners would consider a personal guarantee
- The most common accounting software was Xero
- Monzo is the most popular business bank account
So, why are businesses applying for finance?
An overwhelming 43% of all loan applications were to help bolster cash flow. As we all know, cash flow is the lifeblood of any small business, so it’s unsurprising that business owners are applying to help rebalance the cash scales.
21% of business loan applications were to fuel business growth, and 11% wanted funds to purchase stock. Although most applicants requested funds for cash flow purposes, most lenders don’t have stipulations on how you spend your money, you can spend it however you see fit to support your business.
Top 5 Business Funding Reasons in 2024
🏆 Cash Flow was the main reason businesses applied for funding in the UK
Source: capalona.co.uk
Who’s applying for business finance?
There are plenty of lending options regardless of your company trading status, and although we work alongside lenders that offer loans to both limited companies and sole traders, in 2024, 80% of loan applications came from limited companies, and just 19% were sole traders.
Top Business Types in 2024
🏆 Limited Companies were the most popular type of business structure that applied for funding.
Source: capalona.co.uk
More interesting stats:
- Most applicants were male
- The most common applicant age range was 30 to 40 years.
- Most businesses were based in London
- The median business turnover was £95,000
- 17% of applicants have been trading for 5-10 years, matched by 17% trading for 1-2 years
What kind of industries are applying for finance?
Loan applications by industry show that the construction industry (12%) and retail industry (10.5%) dominated 2024 applications, with restaurants (7%) and ecommerce (6%) coming third and fourth. Construction projects, in particular, can easily creep out of scope and budget, so financial support is needed.
Top 5 Business Industries in 2024
🏆 Construction emerged as the top industry for finance applications
Source: capalona.co.uk
How much are businesses borrowing?
Businesses requested funding ranging from £500 to £10 million through our platform. However, the most common loan amount was £10,000, indicating a strong apetite for businesses looking for smaller loans to support their needs.
Popular Loan Amounts in 2024
🏆 £10,000 was the most requested loan amount by businesses
Source: capalona.co.uk
How long are businesses borrowing for?
In terms of loan duration, 59% of applicants chose a term of 2 years or less, with the one-year term being the most popular, selected by 21.5% of applicants. Reflecting the trend towards smaller loan amounts, this data highlights businesses' preference for shorter repayment periods. However, 17% of businesses selected a 5-year term, making it the third most popular term choice among businesses.
Popular Loan Terms in 2024
🏆 1 year loan term was the most preferred option among businesses
Source: capalona.co.uk
How quickly did businesses need funding?
In 2024, 91.2% of businesses required funding as soon as possible, highlighting the urgency of their situation. Just 7.3% were willing to wait a few weeks, and only 1.5% were prepared to wait a few months. These figures show that businesses are looking for quick funding solutions to address immediate financial challenges.
The Urgency of Business Funding in 2024
🏆 Businesses wanted funding as soon as possible
Source: capalona.co.uk
How businesses feel about personal guarantees
We asked applicants if they would be willing to provide a personal guarantee when seeking finance, and the majority, 58.5%, said yes, while 41.5% were not comfortable with the idea.
Did Businesses Consider a Personal Guarantee in 2024?
🏆 58.5% of business owners were willing to provide a PG
Source: capalona.co.uk
In December 2023, the Federation of Small Businesses (FSB) filed a super-complaint with the Financial Conduct Authority (FCA) over the widespread use of personal guarantees for business loans, arguing that these requirements deter small business owners from seeking financing due to personal risks, ultimately hindering growth and investment.
While the complaint may have raised further awareness among businesses recently, it is clear that a large portion would still prefer to avoid personal guarantees due to the associated risks.
The growth of digital-first banks
With so much choice, choosing a business bank account can be a chore, but finding one that meets your business needs is essential. You might need a bank with an intuitive app and digital-first features or perhaps accounting software integration is essential or you want to access 24/7 customer support.
If you’re wondering which account to choose, you shouldn’t discount digital banks. Our applicants name both Monzo and Tide as their front runners with Barclays coming in third place.
Top 5 Most Popular Business Bank Accounts in 2024
🏆 Monzo ranked as the most popular business bank account for those seeking finance
Monzo
Tide
Barclays
Starling Bank
Lloyds
Source: capalona.co.uk
How are businesses managing their cash?
When seeking finance through Capalona, the most popular accounting software among businesses was Xero, used by 32.5% of applicants. QuickBooks followed with 24%, while Sage accounted for 10%. These stats reflect a strong preference for cloud-based accounting platforms.
Top 5 Most Popular Accounting Software in 2024
🏆 Xero emerged as the most widely used accounting software among our applicants.
Xero
QuickBooks
Sage
FreeAgent
ClearBooks
Source: capalona.co.uk
Conclusion
As we reflect on 2024's business finance landscape, it's evident that the demand for financial support continues to grow. With nearly half a billion pounds requested in funding through our business finance comparison platform, primarily by limited companies, the need for accessible and rapid finance solutions is clear. The trend towards smaller loan amounts, such as £10,000, and shorter loan terms, highlights the importance of cash flow management in maintaining business operations.
We have also found that businesses are adopting tools like Xero and Monzo, highlighting a significant shift towards digital solutions that simplify and streamline financial management.
As we move forward into 2025, understanding these trends and adapting to the evolving needs of businesses will be crucial for both lenders and financial service providers. By staying attuned to these insights, we can better support the growth and resilience of businesses in the years to come.
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