UK’s wholesale and retail trade sector has emerged as the most indebted industry in the country, carrying more than £2.73 billion in total business debt, a recent report has shown.
Swoop Funding analysed 52,000+ businesses to release a "The 2025 UK business debt report" in which it emerged clearly that certain UK industries are shouldering more debt than others.
The wholesale and retail trade is way ahead of the pack with a combined debt of over £2.7 billion, while the manufacturing trade sits at £2.6 billion behind, reflecting the capital-intensive nature of the industry.
The findings point to deep-rooted financial pressures within the retail and wholesale sector; pressures that persist despite modest signs of recovery and years of ongoing transformation.
While the retail sector saw annual retail sales volumes rise by 0.7 per cent in 2024 (the first growth since 2021) volumes remain 0.3% below pre-pandemic levels, and many retailers underperformed in the final quarter of 2024.
This comes amid cost-of-living challenges, shifts in consumer behaviour, and mounting operational costs.
The findings suggest that many retail and wholesale businesses have turned to borrowing not only to manage cash flow gaps, but also to invest in digital transformation, address declining in-store sales, and remain competitive in a sector where profit margins continue to shrink.
Among the regions, London, Manchester and Birmingham top the list of UK cities with the most business debt, registering £4.9 billion, £370 million and £346 million respectively.'
Commenting on the report's findings, Andrea Reynolds, CEO of Swoop Funding, offered below mentioned guidance for business owners seeking to manage and utilise debt effectively:
- Debt can fuel growth. Borrowing strategically can generate significant returns when invested wisely in business development.
- Explore all funding options. Traditional banks aren’t the only source of finance. Platforms like Swoop provide access to thousands of funding products.
- Prioritise cash flow. Ensure liquidity for operational costs with purpose-built products such as VAT loans.
- Consolidate where possible. Streamlining multiple loans into a commercial mortgage can simplify repayment and support asset acquisition.
- Maintain a strong credit profile. Your credit score affects both borrowing limits and rates, so monitor and manage it closely.
