Five years since the first Covid-19 lockdown, data from Start Up Loans shows there has been a surge in aspiring South East-based entrepreneurs taking out finance to bring their business plans to life.
In that time, there has been a 72% increase in the number of first loans in the South East delivered by the Start Up Loans programme, which is part of the British Business Bank, in comparison to the five-year period prior.
This amounts to a £37.6m increase in the total value of first loans between the two periods, amounting to an increase by first loan value of 92%.
For the whole of the UK, the average increase in Start Up Loans value was 44% so the South East has seen significantly more demand for finance than most UK regions.
Start Up Loans data on loan volume applications shows 2020 was a potentially transformational year for UK startups despite the challenges many small business owners faced.
In the financial year that ended just around the time lockdown was first introduced, 924 Start Up Loans supported startup businesses in the South East.
The following year this rose to 1,359, a 47% increase, and numbers have remained higher than pre-pandemic levels ever since.
The pandemic lockdowns brought normal life to a temporary halt and offered a unique opportunity for people to rethink their futures and pursue their dreams.
This prompted many to seek alternative careers, like business owner Christian Amys who took out a Start Up Loan to found Urban Forage after being made redundant from his job as a Michelin star chef.
Christian had always had a keen interest in plants and ingredients, and after amassing a small community of clients and followers he decided to pursue sustainable foraging as a full-time career. He now teaches about foraging laws, as well as where to find the freshest ingredients.
Christian said: “The pandemic shut down hospitality businesses the world over, and I was one of many who were made redundant in the process.
“I knew I wanted to continue working with food. I had always loved the story of ingredients and where to source them so I began to learn more and more about foraging.
“I soon realised I wasn’t the only one interested, and after interest from friends, former colleagues and the wider public, I founded Urban Forage as a way of teaching others about my passion. Lockdown encouraged me to take the plunge, and I’ve never looked back since”.
The five-year period since the first lockdown has also seen a significant increase in Start Up Loans provided to business owners from a Black, Asian and Other Ethnic Minority background across the UK. Nationally, the proportion of loans to recipients from an Ethnic Minority background increased by 5.39% to 19.8%.
About one in 10 (10.55%) of those getting finance are aged between 18-25 while 12.22% are aged 50 or over. Together, these two age groups account for more than a fifth of Start Up Loans. The largest age group are those with more career experience, with 56% aged 31-49 years old.
The age profile of business owners using Start Up Loans to finance their startup or early-stage business has remained consistent pre and post-Covid lockdowns.
Richard Bearman, co-chief banking officer, British Business Bank, said: “When I think about the Start Up Loans programme, the pandemic was a real pivotal moment. So often I meet business owners and their stories start with how lockdown was the chance to stop and really think about what they wanted to do and achieve.
“We saw a huge increase in the number of loans during 2020 and into the early part of 2021. Although some of that demand for finance has understandably cooled off, we still see a lot more people seeking Start Up Loans finance for a business.
“It’s fantastic to see such a large increase in entrepreneurs based in the South East taking out finance to either start or grow a business.”
