New data shows that UK small businesses are taking on multiple high-interest loans from online lenders offering rapid access to cash, when some of the firms could be saving an average of £10,000 per month in interest.

For several years, responsible lenders have seen increasing numbers of businesses applying to refinance expensive loans. Many appear unaffordable.

Theodora Hadjimichael, chief executive of Responsible Finance, descibes how and why Responsible Finance and member CDFIs compiled and published new research to establish the scale of the issue – and what it reveals:

Many businesses have 'stacked' loans (multiple high-cost loans at once), raising questions about whether lenders are undertaking proper affordability assessments and ensuring businesses are well informed of the risks they are taking on.

Commercial finance brokers were involved in 70% of the high-cost loans; since broker commissions are not legally required to be disclosed or transparent, research is needed into whether any lenders pay brokers high referral commissions, creating misaligned incentives.

Small businesses who were able to refinance with Community Development Finance Institutions (CDFIs) cut repayments by an average of £120,000 a year, says Theo, who says that "if a lot of these businesses were able to get to a CDFI first, they'd be on a much stronger growth trajectory, not having to take on expensive, potentially inappropriate product for where they were."

Theo wants more businesses coming to CDFIs sooner and says that comes through partnerships and referrals, and investment into CDFIs so they can grow and be better known.

What next?

• Read the research in full at https://responsiblefinance.org.uk/2026/09/small-businesses-trapped-in-high-cost-loan-spiral-new-research/

• More about Responsible Finance and our member CDFIs: https://responsiblefinance.org.uk

Colleen Ebbitt from JPMorganChase and Danielle Davis from First Enterprise join us today for a fascinating chat about listening to and supporting under-served businesses so they can thrive. How?

Well, Colleen covers JPMorganChase's small business philanthropy, which supports small business owners on their journeys to growth.

A £4m initiative, supported by JPMorganChase, is strengthening community development finance institutions' operations and helping CDFIs to deploy small business loans to great businesses which can't get the finance they need elsewhere.

"The problems that we're trying to solve are complex, multifaceted. They cannot be solved by private sector alone, public sector alone, social sector alone. So the work we do should focus on solving problems and creating value," says Colleen, explaning JPMorganChase's philosophy on the value of partnerships and creating community impact. She also talks about:

• the unique value of CDFIs as experts in supporting underserved businessses and under-invested regions

• how CDFIs take a relationship-based approach: "very different than other parts of the access to finance ecosystem that have become much more automated and quite frankly can make it even more difficult or create additional barriers for accessing finance"

• complementarity with the British Business Bank's groundbreaking Community ENABLE Funding (CEF) Programme

• the mid- and long-term potential outlook and impact

• being part of a "sea-change" by wortking with Responsible Finance, the BBB and CDFIs

First Enterprise is a CDFI which has been around since 1989. Danielle Davis covers how it has always had a strong focus on supporting underserved businesses, including those led by female and ethnic minority founders.

She describes how the JPMorganChase-supported capacity-building programme is giving First Enterprise new "oomph". It's a potent combination, "capital plus capacity" – First Enterprise is an accredited lender through the BBB's CEF programme, and Danielle explains how this means First Enterprise can support many more businesses. Also in Danielle's segment:

• how First is developing while maintaining everything its customers value such as non-financial business support

• what AI can enable

• refinancing short-term high-interest debt, with examples of a business which First Enterprise were able to save more than £30,000 pounds a month by refinancing stacked deals

What next?

• More about Responsible Finance and our member CDFIs: https://responsiblefinance.org.uk

"The only gig in town came with 60% interest, because we were considered subprime lending. It meant that every payment of £15,000 included £9,000 interest." Business owner David, who subsequently saved more than £80,000 in interest a year by refinancing with a CDFI.

When it comes to high-cost credit, most of us think of personal borrowing and payday loans. But the quote above comes from a business owner. More than a decade after the Financial Conduct Authority (FCA) took over regulating consumer lending and introduced the cap on payday loans, there's a new high-cost loan story unfolding. Up to one in four loan enquiries to Community Development Finance Institutions (CDFIs) now come from small businesses seeking to escape unsustainable high-cost loans. It rarely makes headlines, but it is leaving some firms fighting to survive.

In this episode Eleanor Russell, Policy and Research Manager at Responsible Finance, describes the high-cost business loans crisis.

A community development finance institution (CDFI), SWIG Finance, was able to refinance the business owner quoted above, saving his firm £80,000 to £90,000 of interest a year.

Eleanor has more jaw-dropping statistics and describes what banks and government can do so that more businesses become aware of ethical, responsible lending options through CDFIs, earlier.