Finance

Use of external finance by South West businesses showing signs of recovery, according to report


The South West is showing signs of recovery in using external finance among smaller businesses.

The British Business Bank’s third annual Nations and Regions Tracker found that after a decline in most UK nations and regions in 2022 the use of external finance was picking up again the first half of 2023.




In 2022 South West smaller business using external finance fell by 9% from 46% in 2021 to 37%. The share of smaller businesses that would be willing to use finance to grow also declined from 35% in 2021 to 27% in 2022.

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But the bank has said 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.

The tracker also showed that the number of South West equity deals in 2022 bucked the national trend, but values were down. There were 155 deals in 2022, up 4%, up deal value fell by 32% at £0.54bn.

The region also had one of the top five innovative-led clusters outside of the ‘Golden Triangle’ of London, Oxford and Cambridge. Bristol and Bath made 219 deals with the investment value of £0.9bn, just behind Greater Glasgow, and ahead of Newcastle upon Tyne-Gateshead-Sunderland-Tyneside. The analysis also identified two further clusters in the region, one encompassing Devon and the other spanning across the South West and South East borders .

The report credited this lead to the university spinout hub in the Bristol and Bath cluster. Academic spinouts made up 31% of local technology/IP-related deals and 49% of investment value from 2011 to Q2 2023.



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