Small-Business Credit Recovered Unevenly in 2024

Interest rates began to ease in several advanced economies during 2024, but small-business finance did not improve in one clean, global movement. Australia recorded a strong rise in new SME lending. Canada reported cheaper average small-business borrowing and a larger stock of credit. In the United Kingdom, gross lending rose while repayments still exceeded new borrowing. Germany’s smaller firms continued to depend heavily on internal funds, and lenders in the United States remained cautious.

Those differences matter because a headline about rate cuts can conceal the question that determines whether a business can invest: is the right form of capital available, on workable terms, for the specific cash flow and asset being financed?

The OECD’s Financing SMEs and Entrepreneurs 2026 Scoreboard, published on 31 March 2026, brings together official information for 48 countries, principally through 2024 with some 2025 evidence. It offers the best common frame for this comparison, but not a perfect ranking. Each country defines small firms, loan categories and reporting populations differently. The useful comparison is therefore about direction, structure and business behaviour—not whose currency total is largest.

Australia: new lending accelerated, but distress also rose

Australia reported 2,657,809 SMEs in 2023–24, representing 99.8% of enterprises and more than 8.5 million workers. New lending to SMEs increased from AUD 122.5 billion in 2023 to AUD 153.7 billion in 2024, a rise of roughly 25% calculated from the OECD figures. SMEs also accounted for 52.7% of outstanding business loans.

The price signal was less dramatic. The interest rate on outstanding SME loans moved from 6.5% in 2023 to 6.6% in 2024, while the rate on new loans remained at 6.5%. Leasing and hire-purchase volumes rose 6.7% to AUD 13.1 billion, showing that firms continued to finance vehicles and equipment outside a conventional term loan.

More credit did not mean less risk. The OECD reports that unincorporated insolvencies increased from 19 to 22 per 10,000 businesses, while corporate insolvencies reached 40 per 10,000 registered companies in December 2024. For an owner, the lesson is that credit supply and business resilience can move in opposite directions. A growing lending market still demands conservative repayment assumptions.

Canada: rates fell and the stock of small-business debt grew

Canada’s small-business establishments—defined in this snapshot as those with 1 to 99 employees—made up 98% of businesses in 2024 and employed 5.8 million people, or 46.6% of the private-sector workforce.

Outstanding lending to small businesses increased from CAD 134.8 billion in 2023 to CAD 160.1 billion in 2024. At the same time, the average interest rate charged to small businesses fell from 9.0% to 7.3%. The measured premium over the business prime rate narrowed to 0.5 percentage points.

Yet the 90-day delinquency rate rose from 0.25% in 2023 to 0.86% in 2024. That rate remained below 1%, but its movement is a useful warning: cheaper credit does not repair an already weak margin, slow collections or an overextended balance sheet. A borrower should test the loan against a downside case, not only the current rate.

United Kingdom: more gross lending, but a smaller bank-loan stock

UK gross bank lending to SMEs rose 5% to GBP 62.1 billion in 2024. Repayments, however, were higher at GBP 65.1 billion. Net lending was therefore negative by GBP 3 billion for a fourth consecutive year, although the contraction was considerably narrower than the GBP 9.3 billion recorded in 2023. Outstanding SME bank lending fell to GBP 179.3 billion.

The composition of finance is just as important as the net number. Asset-finance new business edged up to a record GBP 23.5 billion. Invoice finance and asset-based lending grew 5% to GBP 11 billion, while overdraft balances fell 2% to GBP 6 billion. Equity investment declined 2.5% to GBP 10.8 billion, and the number of announced deals fell 15.1%.

This is not a story of finance disappearing. It is a story of financing channels separating. A firm buying machinery may find asset finance more aligned with the productive life of the equipment. A supplier with strong invoices but a long payment cycle may examine receivables finance. A company using a short overdraft for a multi-year investment is creating a maturity mismatch even when the facility is approved.

Germany: internal cash remained the first source of investment

Germany’s SME snapshot covers 3.84 million enterprises with annual turnover up to EUR 500 million, accounting for 99.95% of companies under that national definition. In 2024, SMEs borrowed EUR 89 billion from banks and savings banks to finance investment.

Loan size shows how different the Mittelstand financing market is within itself. For investment loans taken in 2023, 69% were no more than EUR 50,000 and 79% were no more than EUR 100,000. Internal financing—profits, depreciation, amortisation and provisions—provided about 51% of SME investment funding in 2023.

The practical point is not that self-financing is always superior. It is that retained earnings preserve optionality. A business that closes its accounts promptly, prices for cash generation and protects working capital reaches a lender with more bargaining power—and can defer borrowing when terms do not fit.

United States: a large small-business economy met cautious credit

The United States had about 33.5 million small businesses in 2024, representing 99.9% of businesses and employing 61.9 million workers, or 46.5% of the private workforce. The OECD describes demand for commercial and industrial loans as strengthening late in 2024, including among small and medium-sized firms, before credit conditions tightened again and demand weakened in early 2025.

US public programmes continued to influence the market. The Small Business Administration introduced its Working Capital Pilot in 2024, a 7(a)-backed line of credit that can use transaction-based or asset-based structures. The State Small Business Credit Initiative had allocated USD 8.4 billion to states, territories and tribal governments by March 2024.

Programme availability does not turn every project into an acceptable credit risk. It changes the menu. A US firm should still compare lender eligibility, guarantee fees, collateral, reporting requirements, variable-rate exposure and the cash source that will repay the facility.

What can—and cannot—be compared

The numbers above should not be converted into a country league table. Australia reports SMEs using its enterprise framework; Canada’s key figures focus on establishments with 1 to 99 employees; Germany’s national definition extends to firms with turnover up to EUR 500 million; and the United States uses its own small-business standards. Loan stocks, new flows, rates and alternative-finance measures also differ in coverage.

Currency totals are therefore not directly comparable, and a lower reported rate does not prove that an otherwise identical borrower would receive a cheaper offer. The OECD itself provides a reader’s guide and methodology because national data are built for national policy as well as international monitoring.

What is comparable is the operating pattern. Rate relief can coexist with rising delinquency. Gross lending can rise while net lending falls. Bank credit can remain important while asset finance, invoice finance and public guarantees solve different problems. Internal cash generation continues to determine how much choice a business has.

A financing decision should begin with the use of funds

Before comparing providers, describe the financing need in one sentence. Is the company covering a temporary gap between delivery and customer payment, purchasing an asset that will generate cash for five years, entering a new market with uncertain revenue, or refinancing debt that no longer fits? Each answer points to a different term, security structure and risk tolerance.

Then prepare the evidence a lender or investor will test: recent management accounts, aged receivables and payables, tax status, existing debt, owner exposure, a base-case cash-flow forecast and a downside case. Show the repayment source month by month. A polished application cannot compensate for an unexplained gap between the loan term and the underlying business cycle.

Finally, compare the full package rather than the advertised rate. Include fees, guarantees, collateral, covenants, reporting work, early-repayment terms and the consequence of a late customer. Keep one fallback—smaller staged investment, equipment leasing, supplier terms, invoice finance or additional retained earnings—so a single credit decision does not control the whole strategy.

The cross-country conclusion

The five markets entered 2024 with different institutions and left it with different credit outcomes. Australia’s new lending jumped. Canada combined lower average rates with higher outstanding small-business debt and a higher delinquency rate. UK firms repaid more bank debt than they drew, even as asset and invoice finance grew. German SMEs still funded much investment internally. US credit demand improved late in the year before lenders became more cautious again.

For entrepreneurs, the durable advantage is not predicting the next central-bank move. It is becoming finance-ready enough to choose among instruments, reject a poor structure and act when a suitable window opens. Across countries, that advantage is built in the same place: accurate accounts, visible cash flow, disciplined working capital and a clear explanation of how borrowed money will earn its repayment.