Swoop Funding’s new report unveils London as the UK’s debt capital for SMEs, accumulating £4.9 billion in business borrowing

London businesses are carrying the highest levels of debt in the UK, according to a comprehensive new report by funding platform Swoop, which analysed the borrowing data of over 50,000 companies across the UK.

The findings show that the capital alone is responsible for £4.9 billion of business debt, equivalent to 26% of all SME borrowing in the UK. The next closest cities, Manchester and Birmingham, trail far behind at £370 million and £346 million respectively.

The Business Debt Report, published this week by Swoop Funding, explores debt levels across UK regions, industries, and business demographics—including the gender of business owners and the age of businesses. It comes at a time of continued economic uncertainty and cautious lending, as businesses navigate inflation, high interest rates, and the ongoing cost-of-living crisis.

Key Findings:

London businesses have accumulated £4.9 billion in debt—more than 12x higher than any other city.
The top five cities with the highest levels of debt are:
London – £4.9bn
Manchester – £370m
Birmingham – £346m
Leeds – £276m
Bristol – £249m
Several London boroughs, including Croydon, Harrow, and Hounslow, appear in the top 20 debt-heavy areas nationally.
The Top 20 Locations With The Most Business Debt In The UK

City
Total debt
LONDON
£4,938,731,801
MANCHESTER
£370,500,564
BIRMINGHAM
£346,667,000
LEEDS
£276,060,894
BRISTOL
£249,702,468
SOUTHAMPTON
£198,416,091
NOTTINGHAM
£195,689,661
EDINBURGH
£194,388,876
GLASGOW
£186,826,053
LEICESTER
£171,085,599
COVENTRY
£170,473,632
NORTHAMPTON
£157,667,617
CARDIFF
£149,386,906
PETERBOROUGH
£138,941,455
KETTERING
£136,412,903
WOLVERHAMPTON
£134,597,204
WARRINGTON
£134,511,744
MILTON KEYNES
£122,431,547
HARROW
£121,908,570
CROYDON
£117,449,440
A deeper dive into business debt across the UK reveals a fascinating correlation between a company’s age and its borrowing behavior.

Start-ups—those within their first five years—have already accumulated over £2.5 billion in debt. Yet it’s not the youngest companies that carry the largest liabilities. That distinction belongs to firms aged 21 to 25 years, whose collective debt surpasses £1.5 billion, underscoring the financial weight that mid-maturity businesses often bear.

At the opposite end of the spectrum, companies aged 46 to 50 report the lowest levels of debt—an intriguing signal that longevity might bring not only stability, but also financial restraint.

Geography adds another layer of complexity. London, long known as a magnet for innovation and start-up activity, leads the pack in young business debt, with fledgling firms shouldering £761 million. Meanwhile, Tunbridge Wells emerges as the unlikely epicenter of mature business debt, with older firms in the area holding some £45 million.

This disparity points to a broader trend: while older businesses often manage substantial liabilities, younger firms appear to be accumulating debt at a more aggressive pace—a trend that may have long-term implications for financial resilience across sectors.

Top tips for utilising business debt for growth:

Andrea Reynolds, CEO of Swoop Funding, shares her tips for entrepreneurial success.

Business debt isn’t inherently bad. In fact, business loans are vital for growth as you are borrowing to invest in your business; the debt you take on when used correctly will repay you multiple times over.
Your bank is not the only source of funding. Many business owners go to their bank to borrow, but there are many reasons why a bank will say “no” that have nothing to do with whether your business is viable. Through Swoop, you can explore thousands of products that may be suitable for your needs, often with lenders who are more flexible and keen to lend than your existing bank.
Cash flow is vital to your business. Borrowing may be essential to ensure that you are able to pay invoices, payroll and utilities on time. Look for products such as VAT funding that are built to address a specific need and keep your finances afloat.
It’s easy to let small loans accumulate over time. Keep on top of what you owe and consider consolidating borrowing. You may be able to include these smaller debts on a commercial mortgage which will mean simpler repayments as well as purchasing a major asset for your business.
Borrow responsibly. How much you can borrow – and what it will cost you to do so – will depend on your credit score. If you have a low score, you may struggle to find a lender as you will be considered a high risk.