Northern Ireland had the highest use of external finance among smaller businesses in the UK’s regions, a new survey from the British Business Bank (BBB) suggests.
The government bank’s latest nations and regions tracker found 52% of smaller firms used external finance during 2024, marginally up from 51% in 2023.
The survey suggests the proportion of businesses planning to borrow or renew doubled last year from 5% to 10%,
The slight increase in external finance in the north came as the UK-wide level dipped slightly to 45% last year.
Established in 2014 as the UK Government’s economic development bank, the BBB’s remit is to assist smaller businesses in accessing finance.
Its latest research found that while Northern Ireland experienced flat demand for loans and overdrafts from the largest small business lenders in 2024, the average usage per capita remains the highest in the UK.
While there was no change in volume of such borrowing, the BBB’s research pointed to a 17% decline in overall value between 2024 and 2023.
According to the tracker, Northern Ireland continues to show a relatively high concentration of core debt finance, even when accounting for the size of the local smaller business population.
Between 2022 and 2024, the north’s ratio of loans and overdrafts approved per 10,000 smaller businesses was 378, ranking first in the UK and well above the average UK ratio of 169.
When it came to equity finance, the BBB said Northern Ireland remains underrepresented, with little change in the number of deals recorded in 2024, however, the tracker suggests Belfast saw a small increase of 5%.
Susan Nightingale, the BBB’s director of devolved nations.
There was no change in the volume of equity deals completed in 2024 relative to 2023, with a slight decline of 1.8% in investment value.
The Belfast city region was the key hub for this activity, accounting for an overwhelming majority of deals (89% on average between 2022 and 2024) and investment value (96%) across the nation.
While the BBB report said Northern Ireland had the highest share of smaller businesses saying they were open to using finance to grow in the UK, it also had a significantly higher share of smaller businesses holding this view who felt it would be difficult for them to get finance (27% versus UK average of 19%).
Northern Ireland also reported the highest regional uptake of leasing, hire purchase, and vehicle finance at 19%, well above the UK average of 10% and significantly higher than London’s 7%.
“In the face of a challenging economic environment, it is encouraging that use of external finance in Northern Ireland remains buoyant,” said Susan Nightingale, the BBB’s director of devolved nations.
“However, it is clear smaller business owners in Northern Ireland continue to favour core finance products and more work to raise awareness of the benefits of equity finance needs to be done.
“If Northern Ireland’s outstanding entrepreneurs are to realise their full potential, then it is vital that they are aware of and have access to different forms of finance.”