The Finance & Leasing Association (FLA) is calling for greater collaboration between lenders, industry bodies and policymakers following concerns raised by members about emerging trends in loan stacking and the potential consequences for the financial resilience of UK businesses.
Loan stacking occurs when businesses take out multiple loans or financing arrangements, sometimes in quick succession, which can create significant repayment pressures where the combined commitments become unsustainable.
A number of FLA members have reported concerning trends in this area, particularly where businesses facing cashflow pressures are accessing additional borrowing without sufficient consideration of their existing financial commitments or longer-term ability to repay.
Access to appropriate finance is essential for businesses to invest, grow and contribute to the UK economy. However, where borrowing is poorly structured or becomes unsustainable, it can undermine the very businesses it is intended to support.
The FLA believes there is an opportunity for lenders, brokers, industry bodies and policymakers to work together to better understand these emerging trends, identify potential gaps in lending practices and ensure businesses can access finance that supports their long-term sustainability.
Shanika Amarasekara MBE, Chief Executive of the Finance & Leasing Association, said:
“Access to finance is fundamental to business growth. It enables companies to invest in equipment, technology and people, manage their operations and seize new opportunities.
“But a number of our members are raising concerns about emerging patterns of loan stacking, where businesses are taking on multiple borrowing commitments that may be difficult to sustain.
“The issue is not businesses having access to multiple sources of finance. It is whether the totality of their borrowing is affordable, appropriate and supports their long-term success.
“For a business facing immediate cashflow pressures, additional borrowing may appear to provide a solution. But if that borrowing is not structured appropriately, it can simply defer the problem while increasing financial pressure on the business.
“We need to better understand what is driving these trends, whether lenders have sufficient visibility of existing borrowing commitments and whether businesses are receiving the information and support they need to make sustainable financing decisions.
“The right finance should help a business grow stronger, not leave it more vulnerable.
“This is particularly important at a time when the Government is rightly focused on improving productivity, encouraging investment and supporting SME growth. Access to finance must be part of that ambition, but so must ensuring that the finance available is appropriate for businesses’ needs.
“There is a wide range of financing options available, including asset finance, leasing and hire purchase, which can support investment in productive equipment and vehicles, alongside other products designed to meet working capital requirements.
“Different businesses will need different solutions. What matters is that the financing arrangements are appropriate, transparent and sustainable.
“We want to work with lenders, brokers, industry partners and policymakers to understand these emerging risks and identify practical ways to protect businesses while preserving access to the finance they need to succeed.
“That is how we can build a stronger, more resilient business finance market that supports investment and sustainable economic growth.”
Notes to Editors
- In 2025, FLA members provided £163 billion of new finance to UK businesses and households, £122 billion was in the form of consumer credit, accounting for almost a third of all new consumer credit written in the UK. £55 billion of it supported the purchase of new and used cars, including over 85% of private new car registrations
- For media enquiries, please contact the FLA press office on 020 7420 9656.
