Equity deals in the south east drop by nearly a fifth

By PHIL CREIGHTON news@wokingham.today

THE UK might have avoided a recession, but research shows that equity deals across the south east have decreased by nearly a fifth last year.

The British Business Bank survey shows that smaller businesses in the south east dropped 8%, to a total investment of £1.1 billion in the first three quarters of 2022.

And year-on-year, the number of deals in the region decreased by 19%

However, the also report shows there has been a demand for external finance, with 36% of South East smaller businesses in the last three years sought or applied for external finance as businesses look to grow.

This figure could be influenced by the bounce back loans the government introduced in the wake of the lockdown phase of the covid pandemic.

Since then the picture changes. The British Business Bank says there has been a drop in demand for finance: nationally, in the third quarter of 2022, just a third of smaller businesses were using external finance, compared to 44% the previous year.

In the south east, that was just 24% of small businesses,

CHANGE: compared to 41% in 2021.

THE UK might have avoided a recession, but research shows that equity deals across the south east have decreased by nearly a fifth last year.

Gross lending grew despite fewer smaller businesses using finance, as they sought larger loans to support their business due to inflationary pressures.

And success rates for those seeking loans fell from 80% to 64% year-on-year.

For overall bank lending, £35.5bn came from challenger and specialist banks in 2022, with a total 55% share of the market. Across the UK gross bank lending increased by

12.8% in 2022, however net lending fell by £8.5bn in large part reflecting repayment of Covid loans.

Steve Conibear, UK Network Director, South and West of England at the British Business Bank, said:

“This report highlights the South East of England’s entrepreneurial spirit, with businesses continuing to show strong appetite for external finance, however they are clearly adapting to a challenging economic climate meaning many are reducing their use.

“At the British Business Bank, we are committed to supporting these businesses as they seek to achieve sustainable growth, and in turn boost economic productivity, by improving their access to external finance.”