Two trade bodies have warned that “loan stacking”, where a business takes out several loans at once, threatens the “financial resilience of UK businesses” and poses “significant risks” to borrowers, with the Finance and Leasing Association (FLA) calling for industry action on the practice.
The FLA, a trade body for the asset, consumer and motor finance sectors, said a number of its members had reported “concerning trends in this area”.
Loans taken out this way are usually at high rates of interest and over short terms that can push a business into a debt spiral, according to The Times. An investigation by the newspaper in September found one small business stacked with 15 different funding facilities that had average interest rates of about 20 per cent.
“For a business facing immediate cashflow pressures, additional borrowing may appear to provide a solution,” said Shanika Amarasekara, chief executive of the FLA. “But if that borrowing is not structured appropriately, it can simply defer the problem while increasing financial pressure on the business.”
The issue, she added, was “whether the totality of their borrowing is affordable, appropriate and supports their long-term success”.
FLA members said they provided £40.3bn of new finance to UK businesses in 2025 and £27.4bn in the first eight months of 2026.
Brokers warned over commission
The National Association for Commercial Finance Brokers (NACFB), which represents brokers who arrange deals between businesses and lenders, has also written to its members about poor practices in the industry.
In a letter sent in September, it expressed “growing concerns” about loan stacking, which it said can “create significant risks for customers” and can “increase the customer’s financial vulnerability and may ultimately cause serious financial harm”.
In a further letter that month, the NACFB reminded members that “commission arrangements must be handled openly and transparently”. It said it was aware of some dealmakers “adding commission to the value of an invoice”, in some cases including it within the amount being financed rather than clearly labelling it for the customer. Both letters are publicly available.
“Where commission is incorporated into an invoice or finance amount without the customer being made aware, it may amount to a secret commission arrangement,” the letter stated. The NACFB added that it would not tolerate “practices of this nature” among its members.
Commercial finance brokers connect companies with a range of banks and alternative lenders. According to the NACFB, its broker members originated £33bn in lending to small and medium-sized enterprises (SMEs) in 2025, up 25 per cent on the previous year.
The Times has previously reported that brokers are sometimes incentivised to sell expensive debt, even when it is not necessarily in the borrower’s best interest.
The NACFB said it requires every member to provide “a clear and concise written rationale explaining why the proposed product and lender are appropriate for the customer’s identified needs and circumstances”.
Regulator review
Small business lending remains largely unregulated, and business borrowers have fewer protections than those available to consumers borrowing money.
A review by the Financial Conduct Authority published on 17 September found that SMEs faced challenges accessing finance, including low awareness about their options and confusion over complex products. However, the City regulator found “no evidence” that its own regulation of SME lending was causing problems.
The watchdog launched the review in March into why UK SMEs were taking out fewer loans than businesses in other countries, and whether its own rules were contributing to the problem.
In October 2025 the Bank of England said its financial policy committee was identifying barriers preventing high-growth businesses from accessing finance.
A review by the Department for Business and Trade in 2025 said that the cost of money was “prohibitively high” for many businesses.
