Small business need for finance hits 8-year peak. Job creation and trade abroad at risk
The percentage of UK small businesses that rely on finance or funding in order to invest in business growth has reached an eight year high – and those most in need of it are the enterprises predicting significant expansion for the months ahead – according to new research by Novuna Business Finance.
Percentage of small businesses that say they would put growth projects on hold – if they were unable to secure funding
Q4 2017 | Q2 2018 | Q2 2020 | Q2 2021 | Q2 2022 | Q2 2023 | Q2 2024 | Q2 2025 |
52% | 49% | 56% | 53% | 55% | 53% | 53% | 58% |
The growth initiatives small businesses are most likely to put on hold if they were unable to secure funding
Increase headcount/ hire new people | 31% |
Launch new products/ services | 25% |
Run a marketing/advertising campaign | 24% |
Launch into new markets outside the UK | 20% |
Modernise IT capability/purchase new IT equipment | 20% |
Invest in new production lines/ machinery | 19% |
Invest in new vehicles | 17% |
Sector highlights
Whilst the need for finance peaked in IT/ telecoms (70%) and the media/marketing sectors (65%), across all but one industry sectors there was a year-on-year rise in the percentage of small businesses needing to secure funding to power one of more growth initiatives.
Q2 2024 | Q2 2025 | |
IT & telecoms | 51% | 70% |
Media and marketing | 61% | 65% |
Real estate | 46% | 63% |
Hospitality & leisure | 56% | 63% |
Manufacturing | 59% | 62% |
Retail | 47% | 61% |
Transport & distribution | 56% | 60% |
Agriculture | 63% | 59% |
Legal | 51% | 56% |
Construction | 53% | 54% |
Medical services | 49% | 51% |
Finance & accounting | 41% | 46% |
Regional Round-up
Around the UK, there was a year-on-year increase in the percentage of small businesses reliant on funding to power growth in six UK regions. The need for finance was strongest in the regions that are home to England’s three biggest cities – London (75%), The North West (65%) and West Midlands (62%).
Joanna Morris, head of insight at Novuna Business Finance commented: “As we all reflect on the economic growth agenda that the government has committed itself to, our research makes two things very clear: First, access to finance is a key requirement of our most successful and most established small businesses; funding is not a plaster to prop-up a struggling business, it’s the catalyst needed to help fast growing businesses to realise their full potential. Second, our research makes clear the immediate and tangible impact of businesses not securing funding – job creation put on hold, product innovation delayed and plans to forge trade details abroad cancelled. All this directly contributes to the economic growth the country at large needs to see – and this is why supporting small businesses at this critical time is so important.
“At Novuna Business Finance, we specialise in supporting established small businesses as an alternative to the high street banks. We offer small businesses in need of capital the ability to finance assets, an alternative that could potentially benefit their overall cash flow and ease pressure on other areas of their budget. With an expert team and award-winning services, we provide access to the financial solutions our customers need and are committed to helping them develop and grow.”