The proportion of UK businesses borrowing money has doubled this year, as firms source funding to alleviate cost pressures and boost tech spending, a survey suggests.
Around 56% of business leaders said they took on new borrowing or credit arrangements in the past year, up from 28% in 2025, according to research by HSBC UK. The survey of more than 1,000 leaders at UK businesses signals that demand for lending has jumped this year.
Cost pressures and strategic priorities
This comes as many firms have faced increased costs, including from higher inflation, utility bills, and increased labour costs, and a surge in fuel costs following the Middle East conflict.
The bank’s survey showed 82% of businesses identified reducing costs as a strategic priority, with 79% prioritising cashflow and liquidity.
Investment driving borrowing demand
James Cundy, head of mid-market corporates at HSBC UK, said “some businesses will have borrowed to manage ongoing cost pressures”, with cost management and liquidity remaining “priorities” for management teams.
But he said: “Evidence suggests that investment is becoming an increasingly important driver of borrowing demand. We’re seeing many businesses focus investment on productivity improvements through technology and workforce skills, while others are using finance to pursue consolidation opportunities and strengthen their market position.”
Planned uses of finance
Firms targeting growth were more likely to take on new finance and to use the funds for mergers and acquisitions, according to the research. Digital technology, research and development, product launches and expansion into new markets were the top planned uses of finance for the wider business population.
Recent business surveys have regularly shown investment into advanced technology like AI as bright spots in an otherwise challenging backdrop for businesses. The latest UK gross domestic product (GDP) figures showed the AI spending boom was a key driver of growth in July, with many of the businesses recording the largest turnover identified as being involved in activities relating to AI and cloud computing.
