Finance markets

Small Business Finance Markets Report 2022

Our Small Business Finance Markets 2021/22 report provides a timely and comprehensive review of financial markets for small businesses.

This year’s report focuses on the role of finance in sustainable growth in addition to the detailed analysis of market developments and individual financial markets that we provide each year.
There are five key findings in the 2021/22 edition:

  1. 2021 has been a year of contrast between the small business debt and equity financing markets. Bank lending has returned to pre-pandemic levels, while equity investment in small businesses has hit record highs.
  2. Growth in production and investment in 2022 should create demand for financing, but notes of caution remain, particularly in the sectors most affected by Covid-19. Economic uncertainty and small business indebtedness will affect financial flows in 2022.
  3. In the longer term, finance can unlock sustainable growth, but businesses run by women and ethnic minorities are missing. Evidence shows that potential funding users are discouraged from applying and, in the case of ethnic minority-run businesses, face higher rejection rates if they apply.
  4. Firms operating in locations with tighter financial markets are also excluded. London continues to dominate important forms of growth finance, with 70% of equity investment in the first to third quarters of 2021 going to companies in the capital.
  5. Removing barriers to financing small businesses and accelerating the use of financing is key to reaching net zero. External funding can help both eco-innovators and eco-adopters contribute to the UK’s net zero goal.

View the full infographic of the Small Business Finance Markets report

The 2021 British Business Bank Corporate Finance Survey

The Bank’s SME Finance Survey was conducted by Ipsos MORI and involved 2,804 small and medium enterprises (i.e. companies with less than 250 employees) in Q4 2021. The survey covers essential topics as well as a number of new issues to establish SME awareness and demand for external services. financing, perceptions of fundraising and its future use in the business, barriers to growth, as well as historical trends and forecasts for growth in 2022. Survey data has been weighted to reflect SMEs UK based on BEIS business population estimates.