A new survey shows that Yorkshire has caught up with the rest of the UK over the past year in its adoption and knowledge of non-bank finance options. In 2018, Growth Street’s survey showed Yorkshire was trailing far behind the rest of the country, however this year the region nearly matches the rest of the UK.
The insights come from a new survey conducted by business finance provider Growth Street. The firm canvassed more than 2,000 employees and directors of UK SMEs in January 2019, following up from its inaugural survey in 2018.
In terms of considering non-bank finance as opposed to a traditional bank loan, Sheffield has come the furthest over the last year, with the number of respondents who had considered non-bank finance nearly doubling to 34% from 16%.
Leeds has also risen from 31% to 39% who have considered non-bank finance – now 4% above the national average of 35%, and above most other UK cities bar Manchester (43%), Birmingham (40%) and London (40%). Leeds businesspeople have also increased their knowledge of non-bank finance over the last year, rising from 18% with a ‘good understanding’ to 21% this year.
The highest growth in understanding took place in the City of Steel, where in 2018 only 2% had a good understanding of non-bank finance. In 2019, this increased 13-fold to 26% - though still 1% below the national average, an indication of strong momentum in non-bank finance.
Across Yorkshire more broadly, respondents who had considered going somewhere other than a bank for their business finance was the same as the national average: 35%. However, when asked where they would go first when seeking funding for their business, only 42% said a bank first – well below the national average of 51%. Yorkshire SMEs were more likely to go to an accountant (15%) than anywhere else in the country.
Across the UK more broadly, people’s understanding of alternative finance options is shown to be on the increase. 34% of respondents said that they were not at all confident in their knowledge of non-bank funding, significantly fewer than the 45% of respondents who attested to the same lack of knowledge in 2018. 66% of respondents had at least some knowledge of finance outside of banks, up from 54% in 2018.
Greg Carter, Growth Street CEO, comments:
“Yorkshire has come leaps and bounds regarding non-bank finance over the last year – and with over 180,000 businesses operating in the region, this sets the tone for a very successful year of growth for the region.
“However, there is still work left to be done by finance providers. Though the City of Steel has seen huge improvement in understanding of non-bank finance, it still falls short of the national average, and Leeds is trailing further behind. The key to success for SMEs and non-bank finance providers alike over the coming year will be to maintain the momentum seen in 2018 and continue to ensure that businesspeople are aware of the breadth of funding options available to them.”