Demand for finance is strong among smaller businesses in the South West and predicted to increase, according to an Ipsos MORI survey commissioned by the British Business Bank.
The survey of small business finance intermediaries in the South West of England, including accountants, lawyers and small business finance advisers, looks at demand, supply of finance and how it is working for smaller businesses in the region.
Findings highlight a strong appetite for finance amongst businesses who, despite having struggled with reduced cashflow throughout the Covid-19 pandemic, are focussing on recovery and growth.
In the South West, intermediaries reported seeing strong demand among start-ups (79%),smaller businesses scaling up (82%) and smaller businesses surviving in uncertain times (90%).
Most of the small business finance intermediaries surveyed expect smaller businesses to require additional debt finance (91%) over the next 12-18 months due to the Covid-19 pandemic, followed by growth stage equity (76%).
Respondents were positive about the finance ecosystem in the South West for smaller businesses consolidating success, with 85% saying it was adequate, compared to 70% for the UK overall. Opinion differed when it came to the ecosystem for smaller businesses at other development stages, with just 38% saying it was adequate to support start-ups.
Aside from the Covid-19 pandemic, the main barriers to demand for finance since March 2020 in the South West were identified as a perceived lack of awareness of the finance options available (69%), access to supply of finance (60%) and an aversion to taking on finance (51%) among smaller businesses. These findings were in line with the results across the UK.
The majority (91%) of intermediaries surveyed believed there were gaps in the supply of finance for smaller businesses in their region at all stages of development. These gaps were most prominent in early-stage equity (68%), growth stage equity (55%) and debt finance (50%).
Despite challenges, around three in five intermediaries believed that smaller businesses finance supply would increase over the next 12-18 months across all forms of finance surveyed. For debt finance, this expectation was significantly higher in the South West than the UK overall (60% versus 47%, respectively).
Steve Conibear, UK Network Director, South and East of England at the British Business Bank said, “It is encouraging to see the demand for finance is strong among smaller businesses in the South West despite the challenges of the pandemic. With demand for finance set to grow to aid economic recovery among smaller businesses, this will significantly help the UK’s economic recovery.
“At the British Business Bank, we remain committed to working alongside our partners to increase awareness of the equity and alternative finance options available to smaller businesses and aide them with the knowledge and support in making the right financial decisions for the future.”
To find out more about how the British Business Bank can help your business visit https://www.british-business-bank.co.uk/finance-hub/