The British Business Bank’s third annual Nations and Regions Tracker finds the use of external finance among smaller businesses in the South West is showing signs of recovery after a decline in most UK Nations and regions in 2022.
Use of external finance declined in all UK Nations and regions in 2022, but was picking up again in the first half of 2023.
- Use of external finance by small businesses in the South West shows signs of recovery after 9 percentage points drop in 2022
- Number of South West equity deals bucks national trend, but values are down.
- Bristol and Bath is one of the top five innovation-led clusters outside the Golden Triangle.
- Smaller businesses in coastal towns have lower appetite for external finance.
Throughout 2022, 37% of South West smaller businesses were using external finance, which was in line with the national average of 36% and a drop of 9 percentage points on the previous year (46%). The share of smaller businesses that would be willing to use finance to grow also declined from 35% in 2021 to 27% in 2022, falling below the UK average of 31% last year.
But national data from the first half of 2023 suggests signs of recovery with levels of external finance use returning to 2021 levels in the UK as a whole (43%), and 42% of smaller businesses in the region anticipating in late 2022 that they would need finance in the following 12 months.
