Small businesses in Northern Ireland need to move beyond traditional financing channels to satisfy their growing thirst for financing, according to the British Business Bank.
He said small businesses have a “strong appetite” for funding, both to help manage stagnant cash in the wake of the Covid-19 pandemic and to spur growth, but many are not well informed alternative financing options.
Conducted by Ipsos MORI, the survey found that 85% of respondents from financial intermediaries – such as accountants and lawyers etc. who said the same about debt financing which includes bank loans and overdrafts.
Tellingly, nearly two-thirds of those polled said demand exceeds supply when it comes to small business finance.
There are gaps in financing at all stages of the business journey, from early stage equity financing to the provision of late stage equity for small businesses. Northern Ireland businesses are twice as likely to experience funding shortfalls for them than the UK average.
The survey also found that a majority of respondents in Northern Ireland believe that small businesses will need additional funding due to the Covid-19 pandemic over the next 12-18 months, particularly funding by loan and start-up equity.
“It is good to see that demand for small business finance remains strong in Northern Ireland as we look into a period of recovery and growth,” said Mark Sterritt, UK Network Director for Northern Ireland at the British Business Bank. “The investigation also revealed a perceived gap in the supply of later stage equity in Northern Ireland. This represents an opportunity for small businesses to look to other funders and expand their links with networks across the UK.
He said the British Business Bank was trying to raise awareness of financing options related to equity and alternative finance.
“We’re here to help create a stronger financial ecosystem and to help small businesses in Northern Ireland start, grow and stay ahead. “