‘Made in Britain’ needs more than markets – it needs credit
7 July 2025
A run of new trade deals has lifted the outlook for UK businesses after years of anemic growth. Access to alternative sources of capital, including securities-backed finance, can help overcome some of the structural constraints that continue to hold them back.
The United Kingdom is stuck in a high-income trap.[1] The average British worker is about 20% less productive than peers in France and Germany, and 30% behind those in the United States.[2] Had pre-2008 growth trends held, annual income per capita would be £11,000 higher today.[3]
This lag is due to decades of under-investment — in capital equipment, R&D, training, and infrastructure. Nearly one-third of the productivity slowdown since the 2008 financial crisis is linked to a lower capital-to-labor ratio.[4]
British businesses fail to invest in capital, partly due to lower access to funding. Business investment in the UK has been the lowest among G7 nations for three consecutive years.[5]
A boost to trade could shift this trajectory. Exposure to global markets can lift productivity by pushing firms to raise standards, improve efficiency, and expand revenue. Despite an international environment of rising protectionism — particularly with US trade policy jolting global trade — the UK has managed to strike new trade agreements with the US, India, and Europe.[6][7][8] In May, a newly reconstituted Board of Trade met for the first time, placing exports as an important channel to boost economic growth.[9]
Access to credit key to capturing trade tailwinds
Exporters are already responding.
Made in Britain, an industry body, reports a surge in membership applications, and Q1 2025 data showed the UK was the fastest-growing G7 economy, partly due to pre-tariff stockpiling.[10][11]
UK trade volumes, badly hit during the pandemic, still lag those of other high-income countries.[12] That means the new trade deals have given export-oriented businesses an opportunity to grow. Mid-sized companies are especially important: just 13,000 account for nearly a third of the UK workforce, yet this segment often struggles to scale.[13] Expanding or exporting overseas is a top priority for many mid-sized businesses, according to an April survey of 500 such firms.[14]
Access to credit will determine whether such UK businesses can capitalize on tailwinds in British trade. Mid-sized firms consistently struggle to secure funding. Banks still demand burdensome personal guarantees, and the government says nearly half of SME loan applications are rejected. The UK has one of the lowest levels of borrowing by non-financial businesses among the G7 economies.[15]
In particular, “scale-ups” — rapidly growing, VC-backed firms — face a £15 billion (US$20 billion) annual funding gap, according to the Confederation of British Industry.[16]
Meanwhile, tight credit conditions persist, with the Bank of England expected to delay rate cuts due to inflation pressures — including an April surge and volatile global energy prices.[17] Wage hikes and payroll tax increases loom, further squeezing margins.[18][19]
Even as improving investor sentiment has lifted the FTSE 100 to a record high,[20] British businesses cannot fully ride the wave of improved global positioning without reliable access to credit.
For a country that urgently needs growth outside its financial services stronghold, enabling trade-oriented businesses to thrive is essential. UK’s new trading momentum offers a path forward — but only if funding ecosystems evolve to match.
Alternative credit will be important for this shift. For long-term shareholders or trading business owners, non-recourse securities-linked lending offers one route to unlock value and reinvest into operations.
From private credit funds to fintech-driven lending platforms, a more diverse and less risk-averse capital environment could bridge the financing gap.
The question facing the UK isn’t whether it can start businesses. It’s whether it can grow them. Growth will depend not just on where British goods can go — but whether British firms can access the credit they need to get them there.
[1] https://www.ft.com/content/bc830276-c8d0-465a-88fc-e06eb83be90b
[2] https://www.theguardian.com/business/2025/mar/12/uk-drops-down-list-of-affluent-nations-after-decade-of-stagnation-niesr-finds
[3] https://ifs.org.uk/news/decade-and-half-historically-poor-growth-has-taken-its-toll
[4] https://www.productivity.ac.uk/news/mind-the-capital-gap/
[5] https://www.ippr.org/media-office/revealed-investment-in-uk-is-lowest-in-g7-for-third-year-in-a-row-new-data-shows
[6] https://www.weforum.org/stories/2025/05/uk-india-free-trade-deal/
[7] https://www.the-independent.com/politics/us-uk-trade-deal-trump-tariffs-savings-b2747901.html
[8] https://www.ft.com/content/befa60a3-916f-4c29-a0e9-8f4ded2e7807
[9] https://www.gov.uk/government/news/board-of-trade-meet-to-help-uk-exporters-take-advantage-of-new-trade-deals
[10] https://www.madeinbritain.org/news/membership-applications-surge-us-tariffs-impact-global-trade-may-25
[11] https://apnews.com/article/uk-economy-growth-g7-reeves-2d7b9761e53d3d490c3181a1fa89651b
[12] https://www.cer.org.uk/insights/perfect-storm-britains-trade-malaise-weak-growth-and-new-geopolitical-moment
[13] https://www.ft.com/content/9b0c51e5-e26f-4b3b-aacd-9a2658efe3c6
[14] https://www.bdo.co.uk/en-gb/news/2025/uk-mid-sized-businesses-target-new-international-trade-routes-amid-shifting-landscape
[15] https://www.gov.uk/government/calls-for-evidence/small-business-access-to-finance/small-business-access-to-finance
[16] https://committees.parliament.uk/writtenevidence/131004/html/
[17] https://www.bloomberg.com/news/articles/2025-06-18/uk-inflation-holds-at-highest-level-in-more-than-a-year
[18] https://www.wsj.com/economy/u-k-labor-market-cools-ahead-of-rise-in-payroll-taxes-cbd0337b
[19] https://www.pricebailey.co.uk/blog/how-will-the-nmw-rise-impact-smes/
[20] https://www.ft.com/content/9cebcd0c-e11a-4bbd-95f8-1ba075e3b66b
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