UK Business Borrowing Doubles in 2026 Driven by Costs and Tech Spend

UK corporate borrowing doubles as businesses balance cost pressures and tech investments

The proportion of UK companies securing new debt or credit arrangements has doubled over the past year, as businesses balance ongoing cost inflation with investments in technology and expansion, according to research by HSBC UK.

A survey of more than 1,000 corporate leaders revealed that 56 per cent of UK businesses took on new borrowing or credit facilities in the past year. That marks a sharp increase from 28 per cent recorded in 2025.

The surge in debt demand coincides with sustained operational cost inflation, including higher energy bills, rising wages, and elevated fuel expenses linked to conflict in the Middle East.

According to the survey findings, 82 per cent of business leaders cited cost reduction as a strategic priority, while 79 per cent noted that cashflow and liquidity management remained central to their operations.

"Some businesses will have borrowed to manage ongoing cost pressures," said James Cundy, head of mid market corporates at HSBC UK, noting that cost management and liquidity remain priorities for leadership teams.

"Evidence suggests that investment is becoming an increasingly important driver of borrowing demand," Cundy added. "We’re seeing many businesses focus investment on productivity improvements through technology and workforce skills, while others are using finance to pursue consolidation opportunities and strengthen their market position."

Investment focus centers on technology and expansion

The research indicates that companies targeting growth were more inclined to secure fresh capital, frequently directing funds toward corporate mergers and acquisitions.

Across the wider business population, primary uses for newly raised capital included:

• Investment in digital technology

• Research and development

• Product launches

• Expansion into new geographical markets

Business sentiment surveys have consistently identified spending on advanced technology, particularly artificial intelligence, as a key driver of corporate activity despite wider economic challenges.

Official figures reflected that trend, with UK gross domestic product data showing that spending on AI and cloud computing supported growth in July. Companies involved in AI related operations and cloud infrastructure recorded some of the highest revenue increases during the period.

Source: Independent