High-Growth Businesses and Borrowing

High-Growth Businesses and Borrowing
January 5, 2026

Fuelling Expansion with Finance

High-growth businesses, often referred to as scale-ups, play a vital role in the UK economy. These are companies growing their revenue or workforce by 20% or more year on year. Research from the Bank of England shows that these businesses grow far faster than the average firm and are key drivers of job creation and innovation.

But rapid growth rarely happens without investment. Over the last five years, UK data has consistently shown a strong link between high-growth businesses and the use of external finance, particularly borrowing. In simple terms, the companies that grow fastest are often the ones that use loans and credit to support their expansion.

High-growth businesses are more likely to use finance

Research from the ScaleUp Institute shows that around 8 in 10 UK scale-ups use some form of external finance to fund their growth. This is almost double the rate of the wider SME population. For comparison, data from the British Business Bank shows that fewer than half of UK SMEs typically use external finance.

Borrowing is the most common option. More than half of scale-ups rely on debt-based finance such as business loans, overdrafts, asset finance, or credit cards. While equity investment plays an important role for some fast-growing firms, especially in technology sectors, it is far less common than borrowing. In practice, loans remain the preferred route for most growing businesses.

This relationship goes beyond coincidence. A study by Capital Economics, reported by FinTech Review, found that UK SMEs which secured a loan increased their monthly revenues by almost 20% on average. Government-backed finance shows similar results. Evaluations of schemes such as the Start Up Loans programme and the Recovery Loan Scheme found that businesses which accessed funding grew faster in terms of turnover and employment, and were more likely to survive long term, according to UK Government analysis.

Why fast-growing businesses borrow more

The reason is straightforward. Growth costs money, and often more money than existing cashflow can support.

Investing in equipment and facilities

Fast-growing businesses often need to invest in machinery, vehicles, technology, or larger premises to keep up with demand. Government research published on GOV.UK shows that access to finance helps businesses invest sooner, leading to higher productivity and stronger turnover growth.

Hiring staff and expanding into new markets

Growth usually means hiring more people and, in many cases, expanding into new regions or overseas markets. According to the British Business Bank, access to finance is critical for funding product development and international expansion among scale-ups.

Managing cashflow pressures

Rapid growth can put pressure on cashflow. Higher sales often mean higher stock levels and larger supplier bills, while customer payments may take longer to arrive. The Bank of England notes that many high-growth businesses rely on short-term borrowing to manage working capital during periods of expansion.

Acting on time-sensitive opportunities

Many growth opportunities require immediate funding. Research from the ScaleUp Institute shows that businesses which do not seek finance often cite lack of knowledge or concerns about securing the right deal, rather than a lack of need.

Retaining control of the business

Many owners choose borrowing over equity because it allows them to retain full ownership. This is one reason debt finance remains more popular than equity among UK scale-ups, even though both are linked to strong growth outcomes, as highlighted by the British Business Bank.

Real examples of borrowing supporting growth

UK case studies highlight how borrowing can act as a catalyst for expansion.

Freeklime, an indoor climbing business based in Yorkshire, secured a £150,000 loan to open a third site. The funding enabled the business to expand beyond its original locations, create new jobs, and move closer to its long-term growth plans, according to case studies published by Mercia.

SeaGrown, an ocean farming business, also used six-figure loan funding to scale up its seaweed cultivation operations. The finance allowed the company to invest in equipment, secure new commercial contracts, and plan significant workforce growth, again supported by Mercia investment reports.

In both cases, the ambition was already there. Access to finance made faster growth possible.

Borrowing as a tool for sustainable growth

The evidence is clear. High-growth businesses are far more likely to use external finance, and those that do often perform better as a result. When borrowing is planned carefully and aligned with clear growth goals, it can help businesses scale faster, manage cashflow more effectively, and take advantage of new opportunities.

At Match Finance, we work with ambitious SMEs who use borrowing as a growth tool, not a last resort. If your business is planning its next stage of expansion, the right finance at the right time could help turn those plans into reality.

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