> ## Content Index > Fetch the complete content index at: https://blog.heygrand.com/llms.txt > Use this file to discover other available public pages before exploring further. # UK credit & lending weekly digest - URL: https://blog.heygrand.com/uk-credit-lending-weekly-digest-volume-16/ - Published: 2026-04-28T06:00:20.000Z - Updated: 2026-04-28T09:58:59.000Z - Author: Kirk Donohoe - Tags: News *Risk moves off bank balance sheets — toward directors, suppliers and specialist finance — Covering 19–25 April 2026 · Published Tuesday 28 April 2026* --- ## **Summary** This week’s credit signal is **fragmentation, not uniform tightening**. Banks are still competing on mortgage pricing, while SME risk is surfacing through director guarantees, supplier payment terms and specialist finance channels.⁶ ⁷ ¹³ ¹⁴ Motor-finance redress is back in live legal risk after Consumer Voice challenged the FCA’s PS26/3 scheme, which carries an estimated **£9.1bn** total cost.¹ ² Corporate stress broadened, with EY-Parthenon recording **55** Q1 profit warnings and **49%** citing policy or geopolitical uncertainty.³ The clearest borrower-side signal was PGI: applications rose **65% YoY**, while restaurants using revenue-based finance rose **43% YoY**.⁶ ⁷ ## **1\. Key developments** - **Motor-finance redress is unsettled** Consumer Voice challenged the FCA’s PS26/3 motor-finance redress scheme, which covers customers treated unfairly between 2007 and 2024.¹ ² The challenge creates potential upside risk to the current compensation estimate, but not a confirmed reset.² - **Profit warnings remain elevated** EY-Parthenon recorded 55 warnings in Q1 2026\. Policy and geopolitical uncertainty were cited in 49% of warnings, while 19% of UK-listed companies warned over the previous 12 months.³ - **Mortgage regulation may loosen at the margin** The PRA and FCA proposed removing the firm-level 15% cap on high loan-to-income lending, while keeping the aggregate market-wide limit. The consultation closes on 1 July 2026.⁴ - **Bank Rate is expected to hold** The MPC meets on 30 April, and a Reuters poll found economists expected Bank Rate to remain at 3.75%.⁵ - **Director-risk exposure is rising** PGI applications rose 65% year on year in Q1 2026, with the average guarantee value reaching £210,350.⁶ - **Hospitality is using more specialist finance** Restaurants using revenue-based finance rose 43% year on year in Q1 2026, according to 365 Finance.⁷ ### Borrower stress signals Selected indicators showing how borrower stress is surfacing across SME and listed-company credit. PGI applications — YoY change, Q1 2026 +65% Restaurants using revenue-based finance — YoY change, Q1 2026 +43% UK-listed firms issuing at least one profit warning — last 12 months 19% Source: \[6\] Credit Connect / Purbeck Insurance Services, Q1 2026; \[7\] Credit Connect / 365 Finance, Q1 2026; \[3\] EY-Parthenon, Q1 2026 Profit Warnings. Note: metrics are shown as headline stress indicators and are not directly comparable on the same underlying basis. ## **2\. Market signals** - **Credit quality and risk** Corporate stress broadened in Q1, with 19% of UK-listed companies issuing at least one profit warning in the past 12 months, and 49% of Q1 warnings citing policy or geopolitical uncertainty — the highest proportion in over 25 years.³ The rise in personal guarantee insurance applications adds a borrower-side signal: more directors are insuring personal liability attached to business borrowing, which is a useful watchlist trigger for underwriters rather than proof of broad bank tightening.⁶ Motor-finance provisioning remains unsettled pending the legal challenge to PS26/3, and Cifas recorded record fraud levels in 2025 — a reminder that faster SME decisioning needs robust verification to match.⁸ ¹ ² - **Credit supply and lending conditions** Mortgage pricing eased at the margin, with Halifax and TSB cutting fixed rates, though this reflects swap-rate competition rather than any broader shift in credit appetite.¹⁴ The PRA and FCA's LTI consultation, if implemented, would remove the individual-firm high-LTI flow limit while keeping the aggregate market guardrail in place — a structural positive for specialist and challenger lenders with affordability flexibility.⁴ In SME finance, the 43% rise in restaurant use of revenue-based finance is best read as reallocation toward specialist channels rather than evidence of blanket bank rejection.⁷ ### Credit quality & risk Selected indicators showing stress in borrower behaviour, listed-company outcomes and underwriting conditions. PGI applications — YoY change, Q1 2026 +65% Q1 warnings citing policy/geopolitical uncertainty 49% UK-listed firms issuing at least one warning — last 12 months 19% Source: \[6\] Credit Connect / Purbeck Insurance Services, Q1 2026; \[3\] EY-Parthenon, Q1 2026 Profit Warnings. Note: metrics are shown as headline indicators and are not directly comparable on one common basis. ## **3\. Where to pay closer attention** - **Hospitality** Restaurants using revenue-based finance rose 43% year on year, while pubs and bars saw a 39% rise in successful funding applications.⁷ This points to greater use of flexible working-capital channels, not necessarily confirmed bank rejection.⁷ - **Construction and building materials** Travis Perkins’ reported move from 30-day payment terms to 60 days from the end of the invoice month shows how working-capital pressure can shift to suppliers.¹³ BMF described a stagnant building-materials market continuing into 2026, while CPA cut its 2026 construction-output growth forecast to 1.7%.²³ ²⁴ - **Listed SMEs and policy-sensitive mid-caps** With 19% of UK-listed companies warning over the previous 12 months, policy-sensitive borrowers deserve closer monitoring.³ - **Commercial real estate** March’s administration spike was driven by more than 100 connected real-estate companies, so it is a watchlist trigger rather than proof of a broad sector collapse.⁹ - **Motor finance** PS26/3 created a framework, but the legal challenge means provision adequacy remains a live question for exposed lenders.¹ ² ¹⁵ ### Sector Insolvencies: 12 Months to Feb 2026 vs. Pre-Pandemic Levels. 12 months to Feb 2026 Pre-pandemic 2019 Construction3,851 vs 3,221 Wholesale & retail3,652 vs 2,458 Accommodation & food3,304 vs 2,323 Source: Insolvency Service, Company Insolvency Statistics March 2026, Industry Tables, Table A1a · BCIS construction insolvency analysis, 20 April 2026 ## **4\. Friction signals — where credit is failing** - **Personal guarantees** New or expanded PG cover should be treated as a borrower-risk signal. A 65% rise in PGI applications suggests more directors are taking or insuring personal exposure linked to business borrowing.⁶ - **Supplier terms** Payment-term extensions are working-capital signals. Travis Perkins’ move to 60-day terms shows suppliers can become de facto financiers when cash pressure rises.¹³ - **Revenue-based finance** A borrower moving into revenue-based finance should trigger updated bureau checks, merchant-receipts review and cash-flow validation.⁷ ⁸ - **Data quality** Cifas’ fraud data reinforces the need for stronger KYB, bureau triangulation and management-account validation in faster SME-credit decisioning.⁸ ## **5\. Who is doing what** - **Lloyds** remains the main listed-bank reference point for motor-finance exposure. It has kept a £1.95bn provision and reports Q1 results on 29 April.¹⁵ ¹⁷ - **Barclays** reports Q1 results on 28 April, with UK NII, provisioning tone and business-credit appetite the key reads.¹⁶ - **NatWest** continued on-market buybacks during 20–24 April, purchasing 7,406,000 ordinary shares through UBS.¹⁸ - **HSBC**, along with Halifax and TSB, cut fixed mortgage rates during the week, signalling mortgage-pricing competition rather than verified broad credit easing.¹⁴ - **GB Bank** joined Knowledge Bank’s criteria platform, giving brokers access to its specialist buy-to-let, bridging and complex-case criteria.¹⁹ - **Wayflyer** secured a $250m two-year credit facility with ATLAS SP Partners, showing institutional funding remains available for specialist SME-credit platforms.²⁰ - **Allica Bank** reported a £3.7bn loan book for 2025 and completed the acquisition of Kriya, adding invoice-finance and embedded-finance capability.²¹ ## **6\. Capital & deployment** - **Capital is not leaving the system uniformly; it is being redeployed by channel** Major banks are returning capital or competing in standardised markets, while specialist lenders and fintech platforms continue to attract funding for SME and working-capital products.¹⁴ ¹⁸ ²⁰ ²¹ - **The operating read** High-street lenders are competing where risk is clearer and more standardised, especially mortgages. Specialist lenders and fintech platforms are taking more flow where underwriting depends on revenue, receivables, merchant receipts or complex borrower profiles.⁷ ¹⁴ ¹⁹ ²⁰ ²¹ - **The contrast matters** NatWest’s buyback points to capital-return discipline at the high-street end, while Wayflyer’s facility and Allica’s expansion show capital still flowing into specialist SME finance.¹⁸ ²⁰ ²¹ ## **7\. From the industry** - **Broker placement remains important** NACFB reported 1,414 member firms and 3,011 brokers as of January 2026, reinforcing the role of brokers in placing more complex borrower profiles.²² - **Building-materials demand remains weak** BMF’s winter forecast described a stagnant building-materials market continuing into 2026.²³ - **Construction growth expectations have been cut** CPA’s winter forecast put 2026 construction-output growth at 1.7%.²⁴ - **BNPL regulation is moving toward go-live** Firms can register for the FCA temporary permissions regime from 15 May to 1 July, and the BNPL/deferred-payment credit regime changes on 15 July.²⁵ ## **8\. What this means** Credit has not disappeared. It is moving. Banks are still active in standardised markets, especially mortgage pricing.¹⁴ But SME stress is showing up through personal guarantees, revenue-based finance, supplier terms and fraud controls.⁶ ⁷ ⁸ ¹³ For credit teams, channel migration should be treated as a risk signal. Moving from bank debt to specialist finance is not automatically negative, but it should trigger updated bureau checks, cash-flow review and sector-level monitoring.⁶ ⁷ ⁸ Motor-finance redress should also stay on the watchlist. PS26/3 created a framework, but the legal challenge means provision adequacy remains live for exposed lenders.¹ ² ¹⁵ ## **9\. Week ahead** - **Bank of England MPC decision** Scheduled for 30 April. Economists expect Bank Rate to hold at 3.75%, so the statement language will matter more than the rate decision.⁵ - **Bank Q1 results** Barclays reports on 28 April, and Lloyds reports on 29 April. Lloyds’ update is especially relevant for motor-finance provision commentary.¹⁵ ¹⁶ ¹⁷ - **Insolvency data** The next Insolvency Service release will show whether March’s real-estate-led administration spike was a one-off cluster or the start of a broader pattern.⁹ - **BNPL regulation** The FCA’s temporary permissions registration window opens on 15 May and closes on 1 July. The regime changes on 15 July.²⁵ ## Stay informed The UK Credit & Lending Weekly Digest is published every Tuesday, covering the developments that matter to lenders and anyone with a stake in the UK credit market. If you found this edition useful, follow along for next week's update! --- Sources 1 FCA — [PS26/3: Motor Finance Consumer Redress Scheme](https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme?ref=blog.heygrand.com) 2 The Guardian — [City watchdog faces legal action over £9.1bn compensation scheme for car loan victims](https://www.theguardian.com/money/2026/apr/22/city-watchdog-faces-legal-action-car-loan-compensation?ref=blog.heygrand.com), 22 April 2026 3 EY-Parthenon — [Almost half of UK profit warnings cite policy change and geopolitical uncertainty](https://www.ey.com/en%5Fuk/newsroom/2026/04/almost-half-uk-profit-warnings-policy-geopolitical-uncertainty?ref=blog.heygrand.com), April 2026 4 Bank of England / PRA — [CP6/26: High loan to income lending](https://www.bankofengland.co.uk/prudential-regulation/publication/2026/april/high-loan-to-income-lending-consultation-paper?ref=blog.heygrand.com), April 2026 5 Reuters — [BoE to hold interest rates through 2026 despite inflation threat: Reuters poll](https://www.reuters.com/markets/rates-bonds/boe-hold-interest-rates-through-2026-despite-inflation-threat-reuters-poll-2026-04-21/?ref=blog.heygrand.com), 21 April 2026 6 Credit Connect — [Surge in directors using personal assets to fund their businesses](https://www.credit-connect.co.uk/news/surge-in-directors-using-personal-assets-to-fund-their-businesses/?ref=blog.heygrand.com), 22 April 2026 7 Credit Connect — [Increase in hospitality sector seeking finance as costs and business rates continue to rise](https://www.credit-connect.co.uk/news/increase-in-hospitality-sector-seeking-finance-as-costs-and-business-rates-continue-to-rise/?ref=blog.heygrand.com), 14 April 2026 8 Cifas — [Fraudscape 2026: Fraud cases hit record highs as criminals adapt and scale](https://www.cifas.org.uk/newsroom/fraudscape2026?ref=blog.heygrand.com), March 2026 9 Insolvency Service — [Company Insolvency Statistics: March 2026](https://www.gov.uk/government/statistics/company-insolvencies-march-2026?ref=blog.heygrand.com), 17 April 2026 10 Allianz Trade — [UK Sector Snippets / Insolvency Report](https://www.allianz-trade.com/en%5FGB/insights/economic-research/uk-sector-snippets-february-2026.html?ref=blog.heygrand.com), April 2026 11 Atradius — [Insolvency Outlook](https://group.atradius.com/publications/economic-research/insolvency-outlook-april-2026.html?ref=blog.heygrand.com), April 2026 12 Coface UK — [British Economic Outlook: Spring 2026](https://www.coface.com/news-economy-and-insights/business-risk-dashboard/united-kingdom?ref=blog.heygrand.com) 13 Construction Enquirer — [Travis Perkins suppliers stunned as payment times increase](https://www.constructionenquirer.com/2025/11/06/travis-perkins-suppliers-stunned-as-payment-times-increase/?ref=blog.heygrand.com), 6 November 2025 14 Forbes Advisor UK — [Mortgage News: Major lenders make cuts](https://www.forbes.com/uk/advisor/mortgages/mortgage-news/?ref=blog.heygrand.com), April 2026 15 Car Dealer Magazine — [Lloyds sticking with £1.95bn provision for motor finance compensation claims](https://cardealermagazine.co.uk/publish/lloyds-sticking-with-1-95bn-provision-for-motor-finance-compensation-claims/355072?ref=blog.heygrand.com), 7 April 2026 16 Barclays — [Financial calendar: Q1 2026 results, 28 April 2026](https://home.barclays/investor-relations/financial-calendar/?ref=blog.heygrand.com) 17 Lloyds Banking Group — [Financial calendar: Q1 2026 results, 29 April 2026](https://www.lloydsbankinggroup.com/investors/financial-calendar.html?ref=blog.heygrand.com) 18 Investegate / NatWest Group — [Transaction in Own Shares](https://www.investegate.co.uk/natwest-group-plc--nwg-/rns/?ref=blog.heygrand.com), 20–24 April 2026 19 Bridging & Commercial — [GB Bank added to Knowledge Bank platform](https://www.bridgingandcommercial.co.uk/news/gb-bank-added-to-knowledge-bank-platform/?ref=blog.heygrand.com), 23 April 2026 20 Wayflyer — [Wayflyer secures $250m credit facility with ATLAS SP Partners](https://www.wayflyer.com/blog/wayflyer-secures-250m-credit-facility-atlas-sp-partners/?ref=blog.heygrand.com), 18 February 2026 21 Allica Bank — [2025 Annual Report and Accounts](https://www.allica.bank/press-releases?ref=blog.heygrand.com) 22 NACFB — [NACFB broker membership tops 1,400 firms](https://nacfb.org/news/nacfb-broker-membership-tops-1400-firms/?ref=blog.heygrand.com), February 2026 23 Builders Merchants Federation — [BMF Winter 2025 Forecast](https://www.bmf.org.uk/research-and-insight/forecasts/?ref=blog.heygrand.com) 24 Construction Products Association — [Construction Industry Forecasts: Winter 2025/26](https://www.constructionproducts.org.uk/news-media-events/news/2026/january/construction-industry-forecasts-winter-2025-26/?ref=blog.heygrand.com) 25 FCA — [Regulating Buy Now Pay Later / Temporary Permissions Regime](https://www.fca.org.uk/consumers/buy-now-pay-later?ref=blog.heygrand.com)