Key findings from the British Business Bank's 2019/20 Small Business Finance Markets Report. Download the full report: https://www.british-business-bank.co.uk/research/sbfm/

1. 2019/20
#SBFM2020
Small Business Finance Markets Report Launch
Report Key Findings
Alice Hu Wagner, Managing Director,
Strategy, Economics & Business Development, British Business
Bank

2. #SBFM2020
Bank lending flows to smaller businesses remained flat
Gross bank lending to SMEs
Source: Bank of England, BVA BDRC SME Finance Monitor
73%
of SMEs would prefer to
grow more slowly than
borrow to grow more
quickly
(up from 70% in 2016)
1.3%
of SMEs applied for a new
loan over 2018 to 2019
53.4
57.9
59.2
57.3
57.7
56.7
2014 2015 2016 2017 2018 2019

3. #SBFM2020
Significant growth in alternative forms of finance
Growth of equity, asset finance and marketplace lending since 2014
2014 = 100
Source: Beauhurst, FLA and Brismo, British Business Bank calculations
23%
growth in equity investment per year
7%
growth in asset finance per year
48%
growth in marketplace lending per year100
150
200
250
300
350
400
450
500
2014 2015 2016 2017 2018
Private external equity investments Asset finance flows Marketplace lending

4. #SBFM2020
Low confidence weighed on investment and increased demand for
working capital
Source: FSB, Voice of Small Business survey
0%
business investment growth
estimated in 2019
46%
of SMEs used finance in the first
half of 2019, driven by demand
for working capital and
cashflow support
Small business confidence reached its lowest point for 8 years

5. #SBFM2020
Source: Beauhurst, Equity investment into UK spinouts
75%
of investment into spinouts is
concentrated in London, Oxford
and Cambridge
£1.2bn
equity investment from
334
deals in 2019
Equity helps develop the innovation ecosystem
Investment into spinouts by UK region (2019)

6. #SBFM2020
Incubators and accelerators help start-ups and scale-ups
Business incubator and accelerator locations
70%
of incubators and accelerators
combined are based outside
London
but London hosts
50%
of accelerators, the majority of
which offer funding
Source: BEIS, Incubator and Accelerator Directory

7. #SBFM2020
London remains the largest market for VC, with other hubs
developing across the UK
VC investor locations
Source: British Business Bank analysis of PitchBook, 2019
27%
of London businesses say
there is a lack of local
investors
43%
of businesses outside London
say there is a lack of suitable
investors in their area

8. #SBFM2020
Bank regional funds have increased high-skilled jobs
Share of jobs in the top quartile of UK income, above £36k
37%
33%
23% 23%
Midlands Engine Investment Fund Northern Powerhouse Investment Fund
Bank-funded investment Regional average
Source: Northern Powerhouse and Midlands Engine Investment Funds early assessments, British Business Bank
analysis of HMRC personal incomes data and ONS ASHE data
559
smaller businesses have received
investment from NPIF worth
£148m
230
smaller businesses have received
investment from MEIF worth
£86m

9. 2019/20
#SBFM2020
Small Business Finance Markets Report Launch
Thank you