Promising signs for equity investment in the region’s smaller businesses

The British Business Bank’s second annual Nations and Regions Tracker, which is published today, has discovered promising signs for equity investment in the region’s smaller businesses despite global economic conditions.

Yorkshire and the Humber has seen a total of £154m invested between January and June 2022 across 48 deals. Investment volumes in the first half of 2022 were substantially above the same period last year, meaning the region is on track to exceed last year’s record of £176m invested.

The report also identified a number of promising clusters for net zero investment activity, with Sheffield highlighted. The area has attracted £35m across 23 net zero equity deals since 2011, with two thirds of deals in the renewables sector and the remaining third in the automotive sector. The cluster is responsible for 40% of net zero deals in the region since 2011.

The Nations and Regions Tracker also found that fewer smaller businesses in Yorkshire were using external finance in the four quarters up to Q2 2022, at 38% compared to 40% a year earlier. This was also considerably lower than the same period last year (45%). Although overall finance use in the UK went down over the period, it was by a smaller margin. Core debt products remain the most used and widely available across the region.

Dr Sophie Dale-Black, UK Network Director for the North of England at the British Business Bank, said: “The British Business Bank is committed to reducing regional imbalances in access to finance. We are seeing promising signs of growth in the region’s equity finance markets, with data suggesting equity investment has held up in the first half of the year. It is encouraging to see evidence of a potential net zero cluster of investment emerging in the region, which is already known as a hotbed of innovation and technology.”