Most discussion of UK SME finance focuses on whether a business can borrow. The Bank of England's Insight on bank lending to high-growth firms, published on 1 October 2026, draws attention to a quieter problem for intangible-rich SMEs: how long they can borrow for.
Among UK SMEs with bank finance, the Bank finds that average loan maturities in sectors with a high concentration of high-growth firms are around 70 months. In other sectors they are around 108 months. That is a difference of more than three years, and it has direct consequences for cash flow, investment and resilience.
For the same amount borrowed, a shorter loan maturity means higher monthly repayments. On the Bank of England's data, businesses in intangible-heavy sectors are not only lent less; on average they also repay faster.
The Bank's analysis is built on monthly SME account data reported by Experian under the Commercial Credit Data Sharing (CCDS) framework, combined with ONS sector data; our analysis of bank lending to high-growth firms covers its headline findings on lending share and collateral. The first pattern is size: among SMEs with bank finance, average outstanding balances are around 40% lower in sectors with more high-growth firms. The other two concern the term of lending.
The product mix is short-dated. In sectors with more high-growth SMEs, the most common credit type is hire purchase (27% of lending), followed by fixed-term deferred payment (19%). In other sectors, the most common is the mortgage (18%), the archetypal long-dated product. The Bank reports that these differences in credit usage are statistically significant for every credit type except unsecured loans.
The gap persists within most products. This is the most revealing finding. It is not only that intangible-heavy firms use different products. For most credit types, when they use the same product, it runs for a shorter period. Secured loans to firms in high-growth sectors run for roughly 100 months against roughly 135 elsewhere; mortgages for roughly 165 months against roughly 210. Two short fixed-term products run slightly longer in high-growth sectors, so the pattern is not universal, but it holds where the terms are longest and the sums usually largest.
| Credit type (approximate repayment period) | High-growth sectors | Other sectors |
|---|---|---|
| Mortgage | ~165 months | ~210 months |
| Secured loans | ~100 months | ~135 months |
| Variable-term account | ~100 months | ~102 months |
| Hire purchase | ~54 months | ~58 months |
| Fixed-term account | ~89 months | ~83 months |
| Fixed-term deferred payment | ~70 months | ~68 months |
| All lending (average) | ~70 months | ~108 months |
Per-product values are approximate readings from the Bank of England's Chart 4; the all-lending averages are stated in the Insight's text.
A loan's maturity is partly a statement about the lender's confidence in what stands behind it. Long-dated lending is usually secured on assets that hold their value and can be sold: property, plant, vehicles. Where the security is weak or uncertain, lenders protect themselves by getting their money back sooner.
The Bank's explanation is consistent with this. High-growth firms derive much of their value from IP, software, data and organisational capital, which are difficult to pledge as intangible collateral. Their revenues can also be harder to forecast. Both push lenders towards smaller, shorter facilities, and towards products secured on a specific, identifiable item rather than on the business as a whole.
A professional services firm with a strong brand, a proprietary delivery methodology and long-standing client relationships may finance its vehicles and IT equipment over four to five years on hire purchase. The assets that generate its margin, the brand, the methodology, the relationships, sit outside the credit decision entirely unless the firm can evidence them.
To show why maturity matters, consider a business borrowing £500,000 on a fully amortising term loan at an illustrative 8% annual rate.
| 70-month term | 108-month term | |
|---|---|---|
| Monthly repayment | ~£8,960 | ~£6,510 |
| Difference per month | ~£2,450 lower | |
| Difference per year | ~£29,400 lower |
Illustrative only. Rates, fees and structures vary by lender and borrower; this is not an offer or a quote.
Roughly £29,000 a year is a meaningful sum for an SME: a hire, a marketing programme, a product release, or simply headroom. A shorter maturity does not change the amount borrowed, and the longer term carries more interest over its life, but the shorter one concentrates repayment into the years when a growing business most needs to reinvest.
There is also a resilience point. Higher fixed repayments leave less room to absorb a slow quarter. For a business whose revenues are harder to predict, a short-dated facility can add risk at exactly the wrong moment. It also shows up in the test lenders apply first: annual debt service is the denominator of the debt service coverage ratio, so a shorter term lowers DSCR on the same cash flow. Our guide to DSCR for IP-backed loans explains how lenders apply that test.
Repayment amounts are calculated on a standard annuity basis. Many SME facilities include arrangement fees, interest-only periods or balloon payments, which change the monthly figure. Ask any lender for the full repayment schedule.
The Bank's data is descriptive: it shows the pattern, not the remedy, and it does not establish causation. But the logic of lending suggests where to look. If short maturities reflect a lender's uncertainty about what it can rely on, then reducing that uncertainty is the lever a borrower controls.
The UK's IP-backed lending programmes illustrate the principle. NatWest, Royal Bank of Scotland and HSBC each, in different ways, bring IP into the credit decision: NatWest and Royal Bank of Scotland lend against IP as formal collateral, while HSBC treats IP evaluation as an integral part of credit assessment rather than as security. (Our FAQ on which UK banks lend against IP compares them.) Each approach only works when the IP can be identified, its ownership confirmed and its value assessed on a recognised basis.
Policy is moving in the same direction. The Insight notes that in July 2026 the Government announced the British Business Bank had allocated £500 million within its ENABLE Guarantee programme to support lending to SMEs and scaling firms with significant IP assets. ENABLE works through accredited lenders rather than directly with businesses, and a guarantee does not value an asset. As more guarantee capacity reaches lenders, the quality of a borrower's evidence becomes a larger part of the decision.
You cannot change how a bank prices risk in general. You can change how much of your business it can see. A complete, evidenced record of your intangible assets gives a lender more to rely on, and more reason to consider a longer term.
If your business is intangible-rich and you expect to raise debt in the next 12 to 24 months, the following steps are worth taking now.
If your current borrowing is concentrated in hire purchase and short fixed-term products, you are likely in the pattern the Bank describes.
Most intangible assets never reach the balance sheet. Software, data, brands, contracts, know-how and customer relationships all need identifying before they can be assessed.
Check that IP created by employees and contractors has been assigned to the company, and that registrations are current. Lenders test this as chain of title; our FAQ explains why chain of title matters for an IP loan.
Usage data, contracts, code repositories, registration certificates and revenue attribution are what move an asset from a claim to something a lender can rely on.
Not only "how much?", but "over what term, and what would you need to see to lend for longer?"
The Bank of England's Insight is careful about its limits. The analysis is purely descriptive, it excludes smaller and challenger banks, and the Bank says its findings do not show that banks are misallocating credit or that all high-growth SMEs face financing constraints. Financing needs differ across firms. Some businesses rationally prefer equity; others need patient capital that bank debt is not built to supply.
But for the large population of established, owner-managed UK businesses that want to grow without giving up equity, often with a sale or succession a few years away, the term of their borrowing matters as much as the amount. Cash tied up in fast repayment is cash not spent building the value a buyer will later pay for.
The Bank closes by calling for further research into how an increasingly intangible-intensive economy is financed. For an owner, the question is narrower and more actionable: can a lender see enough of the business to back it for longer? Our guide to IP-backed loans in the UK explains what UK lenders assess and how to prepare, and IP finance in the UK sets out typical terms for IP-backed facilities.
Source: Bank of England, "Examining bank lending to high-growth firms", Bank Insights, 1 October 2026 (Bighelli, Karmakar, Miranda and Piton). Per-product chart values are approximate. Bank Insights articles do not necessarily represent the views of the Bank of England's policy committee members. Repayment figures are illustrative calculations, not quotes.
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