Ebury’s SME Borrowing Tracker reveals SMEs repay record annual amount in 2023 as businesses chip away at pandemic debt mountain

  • Bank of England figures on lending shows that SMEs repaid almost £10 billion net across 2023
  • Total outstanding debt in 2023 fell by 7% in 2023 compared to 2022 as SMEs look to reduce debt following pandemic borrowing boom and surge in rates

Analysis of the Bank of England’s data1 in Ebury’s SME Borrowing Tracker shows that SMEs repaid almost £10 billion across 2023, with the final three months of 2023 marking the largest quarterly change in SME loans outstanding for 2023 as repayments accelerated towards the end of the year.

In 2023, SMEs repaid a net sum of £9.79 billion, marking a £1.98 billion rise from the net repayments made in the prior year – 2022 – which stood at £7.81 billion, and a £1.64 billion increase from the net repayments made in 2021 which was £8.14 billion.

It signals the largest annual repayment total since the borrowing boom triggered by the Covid-19 pandemic that saw net loans of £44 billion accumulated in 2020 as businesses sought financial help to survive the unprecedented economic restrictions.

When looking at the total amount outstanding on SME loans, the final quarter of 2023 saw a total of £184.32 billion, marking a 7% or £13.57 billion decline in debt when compared to the same period of 2022 (£197.89 billion), and a £25.45 billion decline when compared to Q4 2021 (£209.77 billion).


With the Bank of England holding interest rates at 5.25% since August 2023, SMEs are hurrying along their debt repayments to minimise the heightened costs of debt on their bottom lines. While the first rate cut is priced in by markets for August 2024, the cost of borrowing for businesses is expected to remain elevated for some time.

The majority of SME lending during the pandemic was provided through the government-backed Coronavirus Business Interruption Loan Scheme (CBILS) schemes, of which Ebury was an accredited lender. The Government’s own figures2 show that £25.9 billion was loaned out to around 100,000 firms under the CBILS scheme – under a third (30%) of CBILS facilities have been repaid.

That business support was launched amid a broader package of help including additional loans, the Bounce Back Loan Scheme, capital repayment holidays, extended overdrafts and asset-based finance.

Phil Monkhouse, UK Country Manager at Ebury, commented: “While the cost of borrowing appears to have peaked and is expected to begin falling this year as the Bank of England brings down its base rate, SMEs are nonetheless continuing to make significant repayments.

“Businesses have seen significant volatility in the economic landscape from the restrictions experienced during the pandemic and surging interest rates, to geopolitical tensions driving supply chain bottlenecks and a significant energy shock.

“It has led to a period of SMEs tightening belts and increased focus on bringing down their debt levels to weather this uncertainty and put themselves in a strong position for future growth as we hopefully begin to head towards calmer times. Moving forward, SMEs will need to remain agile with ready access to finance and appropriate hedging facilities to capitalise on the opportunities ahead.”