Region’s small businesses defy pandemic woes with £277m investment secured

The region’s smaller businesses are showing strong signs of recovery and a renewed appetite for growth as equity investment reached £277m by the end of 2021’s third quarter across 46 deals

According to figures revealed today by the British Business Bank’s eighth annual Small Business Finance Market Report 2021/22, this was an 18% rise on the number of equity deals completed in the same period in 2020.

However the region experienced a 25% drop in investment value. Nationally, equity investment in smaller businesses surged in 2021, with figures on course to double with one quarter of data still to go.

Demand for finance in the West Midlands remains robust, with 32% of smaller businesses surveyed stating they would be happy to use finance to grow.

On the supply side, 2021 saw steady growth in the region’s local venture capital sector, with 21 unique investors involved in venture capital now present in the region.  The distance between investors and companies was identified in the Bank’s Regions and Nations Tracker report published in October 2020 as a key factor within equity investment, 67% of equity investment stakes in the West Midlands are within two hours of each other.

Dr Sophie Dale-Black, Midlands UK Network Director at the British Business Bank, said: “This report shows that following an incredibly challenging economic period for small businesses, not only are we seeing our region’s resilience, but there is a clear appetite for growth.

“External finance will continue to play a critical role. Through our programmes, the British Business Bank will continue to support the country’s smaller businesses by improving access and options to secure external finance.

“There is work to be done, breaking down regional barriers to access to finance remains key to levelling up economic opportunity, which we remain committed to addressing.”

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