Half of SMEs Rely on Credit Cards—An Inefficient Financing Choice

UK SMEs Are Turning to Credit Cards Like a Cutting-Edge Coffee Machine

According to a fresh study by GRENKE UK, the go‑to leasing partner for SMEs, more than half of the nation’s small and medium‑sized businesses are borrowing from plastic rather than banks.

These findings paint credit cards as the “quick fix” go‑to, even though they come with a few hidden costs.

Key Takeaways from the 600‑Business Survey

After credit cards, business overdrafts and bank loans are the next favourite, adopted by 39 % of respondents.

<li One third (33 %) of SMEs rely on government loans, a reminder of the generous financial cushion given post‑Covid and during the energy crunch.

<li The retail sector tops the pack: almost 60 % of retailers doling out expenses to credit.

<li Scotland leads the nation, with 60 % of its SMEs using cards.

Other Financing Options – Are SMEs Considering Them?

While two‑thirds (66 %) of businesses have thought about asset finance, 10 % feel they lack enough information to make a smart move.

David Horton, Managing Director of Sales at GRENKE UK, says:

“Credit cards are easy to grab, but seeing how many SMEs depend on them is shocking. Our Lease of Life report shows a knowledge gap in financing options. With interest rates climbing, it’s urgent that SMEs learn about alternatives that can fuel growth.”

Asset Finance: A Hidden Growth Lever?

The report shows asset finance could boost the UK’s GDP by £7.6 bn annually and create up to 114,800 jobs by 2025. In manufacturing alone, one third of SMEs use asset finance, contributing £216 m to the national GVA.

Yorkshire & Humber

25 % of all SME jobs

<li Almost half (46 %) of SMEs want to expand their asset finance use, citing real gains in productivity and profits.

David Horton adds: “While high rates hit profits, the current economic environment is a sweet spot for SMEs to explore alternative funding and unlock future growth.”