Chancellor unlocks over £1bn to support ‘levelling-up’ UK regions
Wednesday’s Budget saw Rishi Sunak touch on the government’s promise to “level-up” the regions of the UK outside of London. Extra funding of over £1bn for Northern Ireland, Scotland and Wales was revealed, as well as new HM Treasury offices in the latter two locations and a civil service hub in the North of England that is due to hire 750 staff members.
The proposed new investment in these areas from the government will undoubtedly impact the UK economy in a highly significant way, however much of the support for small firms will come from private investors. SMEs already contribute 52% of the turnover in the UK’s private sector, and yet many entrepreneurs in regions outside of London do not know how to meet an investor to launch their ideas.
Research from IW Capital shows that, despite the high ambition of people within the UK to start their own business, access to finance is a huge obstacle that stands in their way:
- 31% of the UK have ambitions to start a business
- 23% of the UK are entrepreneurial but have never met an investor and would not know how to meet one
- 23% of the UK know someone with a good business idea but can’t get it off the ground due to a lack of funding
- 16% would have to turn to family or friends for kick-off finance for their business
- 9% of the UK are actively investing outside of the city and into local businesses that benefit their community
- 42% of investors would like to support local businesses or entrepreneurs who benefit their community
- Brits would invest on average £685 each to support the UK’s growing businesses for 2020
Luke Davis – CEO of IW Capital – discusses the rise of regional investment:
“These announcements are a step in the right direction in terms of supporting regional businesses but the majority of funding will come from private sources and investors – extending the support of this community will be vital to regional business growth. London has, for a long time, been the centre of the financial universe and, while it continues to be full of opportunity and optimism, investors are realising the potential of other areas. We have seen more demand than ever for investment opportunities in areas such as the North West, given the government’s speculative plans to move the House of Lords to York.
These new state-sponsored initiatives and infrastructure investment will give businesses confidence but the majority of funding is likely to come from private sources. And given that bank lending to SMEs remains a key issue limiting growth, private equity through schemes such as the EIS will be crucial to unlocking the growth potential of these firms. IW Capital will always look to support the ambitious eco-system of entrepreneurs that exists in the UK, regardless of location, to propel the economy forward.”
IW Capital investment in the regions:
Billian: A Sheffield-based roadmending firm with innovative products designed to recycle and revitalise roads – improving the infrastructure of the UK’s transport network so key to the day-to-day running of the economy.
Impact Recycling: A Newcastle-based recycling firm, who have developed a method to improve the recycling process of two of the UK’s most common plastics. IW Capital provided a £2m investment to fuel the growth of the business by the additional employment of staff and funding licence opportunities.
Inglenook Inns: A group of over 40 pubs based in the North West and Yorkshire. IW Capital provided a £1.83m loan to help the business consolidate its presence in the regions and expand its portfolio.