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Our lending data shows UK healthcare businesses are borrowing more than companies in any other sector, but much of that finance is being used to manage debt rather than invest in growth.
How Much Do Healthcare Firms Borrow?
Metric | Value |
Average loan size | £116,252 |
Approval rate | 83% |
Share of total lending | 4% |
Healthcare firms might borrow less frequently, but when they do, loan sizes are much larger.
Where Does Healthcare Funding Go?
56% on working capital
22% on refinancing debt
Minimal investment in assets and property
That refinancing figure stands out across all UK sectors in our data.
What Is Debt Refinancing and Why Does It Matter?
Put simply, refinancing means replacing an existing business loan with a new one. Borrowers will typically refinance to:
Lower their monthly repayments
Extend their repayment periods
This could point to financial strain, even in a relatively stable industry. For SMEs comparing finance, it highlights the importance of carefully reviewing options to avoid unnecessary cost and unsustainable borrowing.
Why Would Healthcare Firms Not Invest in Assets?
Our healthcare industry data shows limited borrowing for:
Equipment upgrades
New facilities
Property investment
Common reasons for this lack of investment include:
High operational costs
Regulatory pressures
Focus on maintaining existing services
Over time, this reluctance could impact innovation and service capacity.
What Types of Funding Do Healthcare Firms Use?
Healthcare companies in the UK often rely on:
Refinancing products to restructure existing debt
Asset finance for medical equipment
Specialist lending products
Given the size of business loans often taken out in this industry, choosing the right structure is critical.
FAQs: Healthcare Business Finance
Why do healthcare businesses borrow more?
Healthcare firms often have higher operating costs and capital requirements, which drives bigger loan sizes.
Is refinancing a bad thing?
Not always. It can be a smart financial move for lots of SMEs. But high levels across a sector may indicate growing financial pressure.
Why is investment in healthcare assets important?
Investment supports:
Better patient services
Efficiency improvements
Long-term sustainability
Are lenders confident in the healthcare sector?
Yes. High approval rates (83%) in the UK’s healthcare industry demonstrate strong lender appetite.
What are the Risks of Refinancing?
A continued focus on refinancing and consolidation of debt over investment could lead to:
Slower sector growth
Ageing infrastructure
Reduced competitiveness
Philip Brennan, Founder and Managing Director at BusinessComparison, says: “Healthcare providers play a critical role in the UK’s economy and society, but this data suggests many are under increasing financial pressure behind the scenes. The reliance on refinancing, combined with a lack of investment in new assets, could have longer-term implications for the sector.
“From a lender’s perspective, it reinforces the importance of offering tailored, affordable finance solutions that support both operational stability and future investment for small business owners.”
What Should Healthcare Business Owners Consider?
Review borrowing costs carefully
Avoid over-reliance on refinancing solutions
Balance short-term stability with long-term investment
In Summary
The UK’s healthcare sector has:
The highest loan values of any sector
Exceptionally strong approval rates
A clear focus on debt management
The challenge in this industry is shifting from stability back to investment.
About the Data
Proprietary data on real UK businesses and lending activity was collected between June 2025 and May 2026 by BusinessComparison partner Think Business Loans. ‘Approval rate’ refers to the proportion of businesses submitted to a lender for consideration and subsequently approved. It excludes businesses deemed ineligible at earlier stages.
