News

UK credit & lending weekly digest

How credit supply is evolving and where to pay closer attention — Covering 12–18 April 2026 · Published Monday 20 April 2026 (UK)

Summary

A few things caught our eye this week. Insolvency numbers are still running high — 2,022 company insolvencies in England and Wales in March 2026, with construction accounting for 458 of those and administrations up 82% year on year.¹

On the lending side, there's an interesting shift happening. The British Business Bank reported gross SME bank lending rose 9% to £68bn in 2025, with net lending turning positive for the first time since 2020. What stood out to us: challengers and non-bank lenders now make up 68% of overall SME lending. Businesses are clearly finding new routes to capital.⁵

And for anyone following the motor-finance redress story, the FCA's PS26/3 brought some welcome clarity — £7.5bn returning to consumers across 12.1 million agreements, with implementation running through mid-2026.⁴

1. Key developments

Insolvency service, March 2026 (17 April)
England and Wales company insolvencies were 2,022 in March, 7% above February and similar to March 2025. Creditors' voluntary liquidations accounted for 73% of all cases. Construction was the largest sector by count at 458, and the rise in administrations was linked to a concentrated real-estate event rather than a broad-based acceleration.¹
Hospitality
RSM reported accommodation and food services insolvencies rose from 222 in January 2026 to 270 in February 2026, a 22% month-on-month increase while remaining broadly flat year on year. This suggests growing sector pressure that warrants closer attention, though it doesn't place hospitality at the top of the official monthly sector table.²
FCA PS26/3 motor finance redress scheme
Published 30 March 2026. The final scheme covers 12.1 million eligible agreements (down from 14.2 million at consultation stage) and is expected to return £7.5bn to consumers, giving lenders a clearer framework for provisioning and planning.⁴
BoE Credit conditions survey Q1 2026 (9 April)
Lender responses showed spreads on lending to small businesses were unchanged in Q1 and expected to stay unchanged over the next three months — a picture of stability in SME lending conditions.³
British Business Bank / SME lending 2025
Gross SME bank lending reached £68bn in 2025, with £4.6bn in net lending — the first positive annual net figure since 2020. Challenger and specialist banks account for 60% of gross SME bank lending; that share rises to 68% when including non-bank lenders.⁵
Cifas Fraudscape 2026
Cifas reported more than 444,000 cases to the National Fraud Database in 2025, a 6% increase on 2024, including more than 78,000 facility takeover cases. The trend underlines the continued importance of robust identity and fraud checks in credit origination.⁷

2. Market signals

Credit quality / risk signals
The week's most useful signal is that business stress is showing up across more sectors rather than concentrating in one place. Construction still leads the official insolvency table, while hospitality is now showing clearer signs of pressure. The March administration spike in real estate deserves attention, though the Insolvency Service links it to a connected group of companies rather than a sustained trend.⁽¹⁾⁽²⁾

Payment-friction indicators point in a similar direction but should be treated as supporting context rather than official statistics. Credit Connect reported that 55.8% of failed SME payment transactions are never recovered, and highlighted growing interest in asset-based and alternative structures — useful signals of how businesses are adapting.

Motor finance now has defined parameters, shifting it from an open question to a structured earnings and capital-allocation exercise for 2026.⁴
Credit supply / lending conditions
The headline is positive: supply is growing, and businesses have more routes to credit than before. The shift toward specialist, intermediary and non-bank channels reflects a more diverse lending market rather than a contraction in overall availability.⁽³⁾⁽⁵⁾⁽⁶⁾

In specialist property lending, some segments are becoming more selective around valuation methods, exit quality and higher-risk structures — a sign of healthy market discipline rather than a blanket tightening.

3. Where to pay closer attention

Construction SMEs
Still the sector with the highest insolvency count. Construction recorded 458 cases in March 2026. Credit teams with significant construction exposure should ensure their monitoring is current — particularly as some signals appear in payment behaviour before they show up in formal filings.⁽¹⁾⁽⁹⁾
Hospitality
Now warrants closer monitoring. RSM's February data showed accommodation and food services insolvencies rising 22% month on month to 270 — enough to justify a closer look at exposure in this sector.²
Motor finance
Now a defined exercise. Use the FCA's final £7.5bn and 12.1 million agreement figures for any internal planning, replacing the earlier consultation-era numbers.⁴
Commercial real estate
Worth watching, but with nuance. March's administration spike was real, yet concentrated in one connected group. Treat it as a signal to review exposure rather than evidence of a broad sector shift.¹

4. Where credit processes are evolving

Broker channel
Stronger origination through intermediaries reflects businesses seeking more tailored credit solutions. NACFB's £33bn and 25% year-on-year growth shows this channel continuing to mature.⁶
Payment behaviour as early intelligence
Payment patterns remain one of the most useful early indicators of changing business health. The UK policy direction continues to move toward stronger payment discipline, reinforcing the value of real-time payment visibility in credit assessment.⁹
Specialist and non-bank lending
As the lending landscape diversifies, demand is naturally flowing toward channels that can offer more flexible structures and faster decisions. The British Business Bank's market-share data confirms this structural evolution.⁵

5. Friction signals — where credit is failing

Bridging finance remains selective, not uniformly tighter
Some lenders are capping certain products at 75% LTV, but I could not verify a market-wide ceiling.¹⁰
Travis Perkins’ November 2025 payment-term extension remains a live friction signal
The trade press reported a move from 30-day terms to 60 days from end of invoice month for some suppliers, while the company’s 2025 annual report shows payment dates ranging from 52 to 107 days.⁽¹¹⁾⁽¹²
Broker placement appears more complex even as volumes rise
NACFB reported £33bn of SME lending in 2025, up 25% YoY, with public summaries pointing to more lenders considered per deal and more clients arriving after rejection elsewhere.⁽¹³⁾⁽¹⁴⁾
Alternative-finance demand is rising where standard credit is harder to place
Credit Connect reported an 85% YoY rise in searches for asset-based lending, a useful secondary signal of businesses exploring non-traditional funding routes.¹⁵

6. Who is doing what

Major Banks — Lloyds, Barclays, NatWest, HSBC

Lloyds: Its previously disclosed motor-finance provision remains the most visible named bank exposure in ongoing market discussion. No new change in stance was reported this week.⁴
Barclays, NatWest, HSBC: No significant public shifts were verified this week. The clearest reading is that the major banks held steady during a week defined by insolvency data, lending-mix evolution and redress-scheme clarity.

Growth areas

Broker-led and specialist lenders remain the clearest expansion channel. NACFB's broker volume growth and the British Business Bank's market-share data both confirm that specialist deployment continues to grow.⁽⁵⁾⁽⁶⁾

7. Capital & deployment

No new wholesale-funding disruption emerged this week. Capital remains available for SME and specialist lending, increasingly through channels that can price, structure and monitor risk with greater precision. This is consistent with the British Business Bank's 2025 market map and the BoE's Q1 2026 survey.⁽³⁾⁽⁵⁾

8. People moves & leadership signals

Premium Credit appointed Rohit Ghai as Chief Risk Officer, reinforcing risk, compliance and legal leadership as specialist lenders put more weight on governance and regulatory capability.¹⁶

9. From the industry

Broker momentum continues
NACFB reported member brokers originated £33bn of SME lending in 2025, up 25% year on year — reinforcing the intermediary channel's growing role in connecting businesses with the right credit solutions.⁶
Fraud awareness
Cifas' 2025 data shows fraud volumes continuing to rise, underscoring the importance of strong identity verification and monitoring in credit origination — particularly in digitally originated and unsecured segments.⁷
BNPL regulation taking shape
FCA rules for deferred payment credit take effect on 15 July 2026. Firms can register for the temporary permissions regime between 15 May and 1 July 2026 — worth noting for anyone in adjacent consumer credit.⁸

10. What this means

The overall picture this week is one of evolution, not crisis. Business stress is present and spreading across sectors, but credit supply remains available and is diversifying. Construction is still the sector requiring the most attention; hospitality is now on the watchlist; motor finance has moved from uncertainty to clarity; and the lending market continues its structural shift toward more specialised channels.⁽¹⁾⁽²⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾

What makes this worth paying attention to is how signals are appearing. In an evolving environment, the early indicators tend to show up in payment behaviour, sector-level data, product selectivity and channel shifts — well before they become visible in aggregate lending volumes. The businesses and credit teams that see these signals earliest are the ones best positioned to act on them.⁽⁵⁾⁽⁹⁾

11. Week ahead

The Bank of England MPC meeting on 23 April is the clearest near-term watchpoint for funding and pricing expectations. The next insolvency release in mid-May will show whether March's cross-sector pattern continues, and the BNPL temporary-permissions window remains the next scheduled regulatory milestone in consumer-adjacent lending.⁽¹⁾⁽⁸⁾