Making smarter credit decisions: 5 SME lending trends shaping 2024

Want to make smarter small business credit decisions in 2024? Here’s how to realise the SME lending opportunity while managing risk.

With £2.1 trillion turnover per year, small and micro businesses are a lucrative and growing market in the UK. But lending to these organisations can be fraught with challenges.

Representing 99.3% of the UK’s business population, small businesses – those with under 250 employees – will be critical for the country’s economy in the year ahead.

Accessing loans and credit will be crucial for turning growing businesses into thriving ones. However, Bank of England data suggests lending to SMEs is currently down by 4.6% compared to a year earlier1. This presents a significant untapped opportunity. 


But obstacles lie in the way. Many small businesses have a limited commercial credit history, and making informed credit decisions can be challenging, time-consuming and costly.

Understanding the SME landscape and the latest technology will be essential for realising the lending opportunity – and providing critical support for businesses to succeed.

As we enter 2024, in this article we will explore the most important SME lending trends for the year ahead – and how lenders and credit providers can navigate the current market and make confident decisions.


Trend 1) Timely insight is a critical differentiator for lenders in turbulent times

Economic uncertainty is likely to continue throughout 2024, as the UK economy looks to bounce back from years of growth stagnation.

SMEs have already been significantly hit by this environment, with liquidations increasing – in November 2023 the number of registered company insolvencies was 21% higher than in the same month in 20222. Lending has also become more challenging, with UK loan defaults seeing a 65% increase from 2022 to 20233, according to Commercial Credit Data Sharing (CCDS) initiative data.

In this context, managing credit risk becomes more complex and more important if small businesses are to access vital funding.

Realising the small and micro business lending opportunity – while managing risks – requires comprehensive, timely data. Enhanced insight used to power smart decisions on businesses of any size – will be a competitive differentiator for lenders and credit providers managing portfolios in the year ahead.


Trend 2) Unifying commercial and consumer data unlocks growth opportunities

Making informed credit decisions on small businesses has been historically difficult.

There is limited risk insight, a heightened risk of credit losses and a lack of confidence in growing SME portfolios. As an additional complexity, many small and micro business owners operate from their personal bank accounts.

Simply put, commercial data scores aren’t enough for lenders and credit providers to make the best decisions.

“Simply put, commercial data scores aren’t enough for lenders and credit providers to make the best decisions.”
Ravi Sidhu

However, moving forward there is an opportunity to attain a holistic and unified view of a business entity – as well as gain a better understanding of the people behind these businesses and their financial behaviours.


This is made possible by accessing a blended score, combining comprehensive commercial data and consumer data – an enhanced capability for Dun & Bradstreet from our partnership with TransUnion.

Let’s look at the range of data and metrics which can be merged. Business data includes risk scores, credit ratings, and ownership. Commercial credit data sharing can cover defaults and active facilities. Consumer data can confirm they are registered at the address they have given, their level of indebtedness and their history of managing that debt.

Our customers have seen a blended score outperforming commercial risk scores for businesses of all ages and sizes. The outperformance is more significant for smaller businesses with less than 20 employees4.

And because lenders have a clearer picture, this often improves the terms of a loan for applicants, while also protecting lenders from the potential of defaulting.

As such, lenders and credit providers can identify new growth opportunities. It enables them to build better customer management strategies which reflect changing behaviours and circumstances, while effectively managing risk.


Trend 3) Automation expedites new business decisions for the most agile lenders

SMEs often want to move quickly and expect their financial service providers to keep up, especially given their experiences with digital banking at a personal level. A fast-decision-making process may be the differentiator when choosing between lenders.

Firms need to digitalise to stay ahead in 2024. Time-consuming, manual processes are not only inefficient for lenders – they can miss out on opportunities too.

" Firms need to digitalise to stay ahead in 2024. Time-consuming, manual processes are not only inefficient for lenders – they can miss out on opportunities too.”
Ravi Sidhu

Automating credit-worthiness assessments with a unified view of an applicant’s risk profile increases speed. Lenders can put in place straight-through processing (STP) to expedite new business – which in turn improves customer experience, while improving loyalty and customer retention.



Trend 4) The new Data Protection Regulation sets compliance challenges for non-customer consumer data

The new Data Protection Regulation is now in force in the UK. The rules come with significant penalties for non-compliance – making high security and privacy standards critical, particularly when using non-customer consumer data.

For SME lenders and credit providers, it will be important to assess their use of data to ensure practices fall within the new regulations.

Equally, lenders should work with data providers that maintain the top levels of compliance, particularly when accessing a range of data types.


Trend 5) Proactive steps to support small businesses will set some lenders apart

Small and micro businesses will need to navigate changing circumstances throughout the year ahead and may run into difficulties.

By receiving key data quickly, lenders can act earlier and more decisively at the first signs of distress, offering support in a timely way.

A combination of tools and automated alerts can help lenders assess the risk associated with directors, as well as flag when credit limits should potentially be reduced.

It’s also possible to spot directors’ high-risk activity before it is reflected in their business financials, meaning lenders can act faster too.

Lenders can do the right thing as a result – protect their investments while enabling SMEs to navigate challenging circumstances.

As always, success in SME lending in 2024 will depend on engaging with the right businesses. From large enterprises to sole traders, we help lenders to make smarter credit risk decisions on UK businesses of any size. Explore how D&B Consumer Data and Blended Scores can help you automate risk decisions for new customers, better manage your existing portfolio and act decisively on early signs of distress.


  1. Source: Bank of England, Businesses’ Finances Raised, January 2023
  2. Source: Welcome to GOV.UK , Monthly Insolvency Statistics, November 2023
  3. Source: Commercial Credit Data Sharing (CCDS)
  4. Source: Dun & Bradstreet data