External finance use stayed steady in 2024 for small businesses across the UK, with more firms open to borrowing, according to the British Business Bank’s latest Nations and Regions Tracker.
In 2024, 45% of smaller companies used external finance, down just 1 percentage point from the year before.
Northern Ireland had the highest use at 52%.
The North West and East of England saw the biggest growth in finance use, up 5 and 3 percentage points.
The East Midlands, North East and Wales all saw drops, with the East Midlands down 9 percentage points.
The types of finance small firms used stayed about the same as in 2023.
Credit cards were the most common at 15%, followed by overdrafts at 11%, and leasing or hire purchase at 10%.
Grants, overdrafts and credit card use each dropped by 2 percentage points.
More small businesses said they were open to using external finance to grow, rising 5 percentage points to 38% UK-wide.
The West Midlands had the sharpest increase, up 20 percentage points.
Yorkshire and the Humber saw a 9 percentage point rise in firms planning to apply or renew finance, up to 16%.
Still, caution remained, with 19% of firms who were open to borrowing saying it would be difficult to get finance.
The small and medium-sized enterprise (SME) Finance Monitor showed more appetite for risk, with the share of “Ambitious Risk Takers” up from 27% in 2023 to 31% in 2024.
Equity investment fell in 2024, down 2.5% to £10.8bn, and deal numbers dropped 15.1%.
Early figures for 2025 show this trend continuing.
Outside London, the number of venture capital investors per 100 high-growth firms rose from 3 in 2023 to 5 in 2025.
This was the first time since 2017 that investor growth outside London was faster than in the capital.
The North West and South West saw more deals per 100 high-growth firms, closing the gap on London a little.
The North West had an 11% rise in deals and a 46% jump in investment value in 2024.
The East of England led on investment value per 100 high-growth firms, driven by areas like Cambridge.
In 2024, the Cambridge and Peterborough mayoral authority area had 82 deals worth £748m, the highest outside Greater London, though activity fell compared to 2023.
The British Business Bank continued to support smaller firms, mainly outside London.
In 2024/25, 84% of new businesses supported were outside the capital, leading to an expected £4.7bn in extra gross value added (GVA) and supporting around 22,100 jobs across the UK.
The Bank is expanding regional finance, with the Government committing £6.6bn in June 2025, taking total capacity to £25.6bn.
Of this, £350m has gone to new investment funds in the East and South East.
The regional angels programme was boosted by £340m and hit record activity in 2024/25, with new backing for angel networks and innovation-led firms.
Richard Bearman, chief development officer at British Business Bank, said: “In the face of a challenging economic environment, it is encouraging that use of external finance has remained stable.
“This year’s Nations and Regions Tracker also indicates that optimism is brewing for small businesses and we hope to see this reflected in their use of external finance in the near future.
“The British Business Bank is pivotal to providing businesses across our regions with access to the finance they need.”
Bearman added: “With the expanded capacity of the Bank under the Modern Industrial Strategy, we are poised to build on our existing work across the nations and regions, including the new investment funds for the South East and East of England.”
