Optimism grows for external finance amongst smaller businesses as the focus in the East Midlands turns to innovation
In 2022, the East Midlands witnessed a decrease in the number of smaller businesses accessing equity finance, with a 3% reduction in equity deals and a 37% drop in investment compared to the previous year.
This trend mirrors a national decline in the accessibility of equity finance for smaller businesses.
Despite this decline in 2022, the East Midlands still contributed 7% of the total equity deals and 6% of the investment value in the UK.
In addition, in the 2022/23 financial year, the British Business Bank was able to assist 596 businesses through interventions and financial support, marking a 33% increase from the previous year.
Encouragingly, the British Business Bank’s latest Business Finance Survey, conducted in late 2022, shows early national data which indicates signs of a recovery.
Early 2023 data reveals an uptick in financial support. The survey uncovered that 46% of East Midlands smaller businesses in 2022 expected to require financing in the next 12 months, with 30% expressing their willingness to use finance for business expansion.
This comes after a 7% decrease in the proportion of East Midlands smaller businesses that utilised external finance during 2022 (34%) compared to the previous year (41%).
Dr Sophie Dale-Black, UK network director for the Midlands, British Business Bank said: “This year’s Nations and Regions Tracker shows that there is reason to be optimistic about the use of external finance from smaller businesses in 2023 as the region experienced a decline in 2022.
“The East Midlands is a region that is growing and finding a specialism in the sub-sector of life sciences that really sets it apart from other regions across the UK. The figures we are witnessing from the Derby-Leicester-Nottingham innovation cluster, in particular, show the steps that are being taken by the British Business Bank in the region. This is creating an exciting trajectory for innovation while creating a positive impact in the region.”