Record levels of lending despite challenges in market
Origination levels for the financial year ending 30 June 2025 reached a record £381m in funding to UK SMEs, representing a small increase on the previous financial year.
Throughout the year, UK mid-sized businesses faced significant uncertainty and challenge, including global tariffs, rising business taxes and the Base Rate falling less frequently than forecasted, among other macroeconomic pressures. Collectively these factors contributed to a dampening effect on the demand for borrowing. This slowdown is reflected in the most recent industry figures from Experian*, which show a year-on-year dip in UK M&A activity by 24%. Despite these challenges, ThinCats continues to be the number one debt provider for M&A funding*.
Over the past 12 months we have seen lending to owner-managed businesses surge, especially following the Autumn Budget, and a significant increase in use of our Transitional Capital strategy, a flexible borrowing solution that is especially useful for companies engaging in ‘buy and build’ growth plans. While sponsor-backed funding generally reflected the market sentiment, our lending remained stable, as did our levels of funding in the Healthcare space.
In total, we have lent more than £2bn to businesses across the UK, while assets under management stand just under £1bn.
It’s been a hugely challenging year for UK companies. At home and abroad, we have seen enormous challenges, but adversity can often lead to opportunity with interest and borrower activity across healthcare, telecoms and B2B services. There continues to be huge resilience across the mid-sized SMEs who are looking to grow and invest. Despite these challenges, there is more certainty in the market, and we are seeing more activity in the market.Mike Hackett, Chief Commercial Officer, ThinCats
*Experian M&A MarketIQ: Q1 2025
