By Terry Ashton, updated January 24, 2025
Business loans around the world are expected to drastically rise to $12.17 trillion in 2025 from $11.29 trillion in 2024, with a 7.8% compound annual growth rate. With the expansion of small and medium enterprises (SMEs) loans, business financing solutions are rising, particularly in the Asia-Pacific region where the market is expected to grow significantly by 2028.
Thus, this expansion leads to the evolution of business financing from traditional methods to innovative options like crypto-backed loans.
Global Perspective on Traditional Business Loan
Traditional business loans remain a cornerstone of financing for small businesses globally. They provide essential capital for growth and operations.
Despite the rise of alternative lending options, many businesses still rely on conventional loans from banks. Reasons being, they offer lower interest rates and structured repayment terms.
However, access to these loans varies based on:
- Economic conditions.
- Regulatory environments
- The creditworthiness of borrowers.
In the United States
In the United States, traditional business loans play a big role.
In the year 2023, banks approved approximately 1.78 trillion in funding the businesses. In 2024, there was a $56 billion record of loan distribution. This indicates the importance of government-backed lending programs in enhancing access to capital.
Interest rates for small businesses loans in the US vary depending on loan type and borrowers qualifications. Small business loan rate ranges between 10% to 16%. Businesses with poor credit have a higher interest rate from 20% to 99% for bad credit loans.
Despite alternative lenders offering competitive approval rates, easy and faster access to funds, many small businesses remain cautious about borrowing.
In The United Kingdom
In the United Kingdom, traditional business loans are offered by high street banks, which provide essential financing options for small businesses.
In 2022, 53% of lending were for alternative and challenger lenders. This indicates a shift to non-traditional lenders that offer easy eligibility and quick approval compared to traditional banks.
As of January 2025, the UK business lending environment is characterized by a blend of traditional and alternative financing options. Thus, encouraging competition among lenders and enhances access to capital for businesses at various stages of growth.
In Germany
In Germany, state-owned banks, particularly KfW Bank (Kreditanstalt für Wiederaufbau), play a crucial role in supporting businesses, especially small and medium enterprises (SMEs).
KfW provides approximately €30 billion in loans to SMEs, demonstrating its commitment to fostering entrepreneurship and economic growth in the country.
South Africa
Approximately 70% of small businesses report difficulties in securing loans, primarily due to inadequate credit histories and lack of collateral.
Emerging businesses also face the hurdle of high interest rates, which can range from 10% to over 20%, making borrowing costly and unsustainable for many. These financial pressures often lead to a cycle of debt, hindering growth and innovation.
Despite initiatives like the Africa SME Programme aimed at improving access to business finance, the need for more tailored solutions remains critical to support the vibrant SME sector in South Africa.
Netherlands
In the Netherlands, a variety of financing solutions are available for both startups and established companies. Government initiatives like the WBSO (R&D Tax Credit) and the Innovation Box provide significant support, offering tax incentives and funding for innovative projects.
In addition, programs such as Proof-of-Concept funding cater to startups and SMEs, enabling them to secure loans for early-stage development.
Crypto Business Loans
Crypto business loan is a financial service that allows individuals and businesses to borrow or lend cryptocurrencies. It is facilitated through decentralized finance (DeFi) platforms or centralized exchanges.
Adoption of Crypto Business Loans
In United States
The crypto business loan in the United States is gaining momentum, driven by a favorable regulatory environment anticipated under the newly inaugurated Trump administration.
As of January 2025, Binance CEO Richard Teng predicts “much clearer regulation” that could bolster the cryptocurrency market, leading to a new all-time high for Bitcoin, which recently surpassed $100,000.
This positive outlook is reflected in the growing interest in crypto lending platforms, with the total value locked in these services reaching around $20 billion.
In Europe
As of January 2025, the European crypto market is projected to generate revenues of approximately $15.48 billion, with a compound annual growth rate (CAGR) of 6.12% from 2025 to 2028.
This growth reflects a broader acceptance of cryptocurrencies and decentralized finance (DeFi) solutions among European businesses.
Germany leads in this trend, with significant investments in blockchain applications for various sectors. The European Banking Authority (EBA) reports that EU engagement with DeFi is higher than the global average.
In South Africa
The South African Reserve Bank is preparing to regulate crypto assets, which could enhance the legitimacy and safety of crypto-backed financing.
As of January 2025, the market for crypto loans is expanding, with significant interest from entrepreneurs seeking liquidity without liquidating their assets.
In New Zealand
In New Zealand, there is also emerging interest in crypto-backed financing, supported by a growing acceptance of cryptocurrencies.
As of early 2025, approximately 10% of New Zealand businesses are exploring crypto lending options. This reflects the desire for flexibility and quick access of funds.
Crypto Lending Vs Traditional Lending
Crypto lending allows borrowers to secure loans using their cryptocurrency holdings as collateral, offering quick access to funds without the need for credit checks. Unlike traditional lending, which often requires extensive credit evaluations and lengthy approval processes.
Crypto loans feature interest rates ranging from 3% to 20%, influenced by market demand and the type of collateral provided, while traditional loans generally have rates between 5% and 30%, depending on the borrower’s creditworthiness.
Conclusions
With the high rise of small business globally, business loans are revolving from traditional loans to crypto-backed loans.
Most regions globally have backend Crypto business loans, due to easy eligibility and quick access of funds.
The future of Crypto business loans is brighter.