Equity investment in Yorkshire small businesses hit £79m at the end of the third quarter of 2021 in 52 deals, new research shows.
The British Business Bank’s Small Business Finance Market 2021/22 report found there was a 4% increase in the number of equity deals done over the same period in 2020, but the region saw a decline 29% of the value of the investments.
Nationally, equity investment in small businesses surged in 2021, with numbers on track to double, with a quarter of the data still to go.
Demand for finance in Yorkshire remains robust, the bank said, with 32% of small businesses surveyed saying they would be happy to use the finance to grow. On the supply side, 2021 has seen steady growth in the local venture capital sector in the region, with 20 unique investors involved in venture capital now present in the region, more than doubling since 2017.
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 in equity investing, 56% of equity holdings in Yorkshire and the Humber are at less than two hours apart.
Sophie Dale Black, UK Network Manager for the North at the British Business Bank, said: “This report shows that after incredibly difficult economic times for small businesses, not only are we seeing the resilience of the region, but there is has a clear appetite for growth.
“External finance will continue to play a vital role. Through our programmes, British Business Bank will continue to support small businesses across the country by improving access and options for obtaining external finance.”
“There is work to be done, removing barriers to accessing finance remains key to leveling economic opportunity, which we remain committed to addressing.”
In the October 2021 spending review, the government announced an additional £660 million for a successor fund to the Northern Powerhouse Investment Fund (NPIF) provided by the British Business Bank.
Since its launch in 2017, NPIF has invested over £300m directly in 952 businesses across the North of England, alongside an additional £400m co-investment from the private sector, bringing its total delivery to over of £700 million.
An additional £150m for the bank’s Regional Angels scheme, which commits funds alongside other angel investors, was also announced during the spending review.