A new investigation into start-up loans in the UK has revealed that the British Business Bank awarded almost 10,000 start-up loans to businesses throughout the 2022/23 financial year.

BusinessComparison wanted to examine the regions receiving the most Government start-up loans and investigate which UK cities are start-up ‘hotspots’. To do so, they sent FOIs to the British Business Bank and the councils of the 50 largest UK cities.

Speaking on the findings, Philip Brennan, Founder and MD at BusinessComparison, said:

‘’Our study into start-up loans and businesses around the UK yielded some fascinating results. In particular, it was intriguing to learn that the amount of loans being awarded from the British Business Bank has decreased since the previous financial years, with outside factors such as interest rates and inflation, it will be interesting to see how this trend develops in the future.

‘’Furthermore, it was valuable to note the UK cities with the highest amount of start-up businesses. While we didn’t receive responses from every council, our investigation produced some useful insights into which areas have a large amount of these new businesses.’’

Overall, 9,536 start-up loans were awarded to new businesses during the last financial year, in total, these loans cost a combined £120 million. This was less than the years previous with 10,372 loans awarded in 2021/22 and 11,318 handed out throughout 2020/21.

Business Comparison found that London was the region boasting the highest number of start-up loans during the financial year of 2022/23 with 1,491 in total. This was closely followed behind by the South East (1,217), and North West (1,091).

On the other hand, Northern Ireland was revealed as the UK region with the least amount of start-up loans awarded throughout 2022/23 – with just 149. Wales also ranked quite low in terms of loans paid out, with 318 during the 2022/23 financial year.

Analysing years previous revealed that the number of loans has been decreasing year on year. Below is the total number of loans per financial year and the combined total cost of these awarded start-up loans:

2020/21: 11,318 loans costing £137.3 million

2021/22: 10,372 loans costing £130.7 million

2022/23: 9,536 loans costing £120 million

2023/24: 3,141 loans costing £40.2 million (so far this financial year)

This means in the past four financial years, new businesses have received a combined total of £428.2 million in the form of start-up loans. Despite this, it’s clear to see that a trend is forming, with fewer loans being awarded each year. In turn, the amount paid out drops with it.

BusinessComparison also wanted to find out how many start-up companies were in specific UK cities. To do so, they contacted the councils of the top 50 UK cities by population and received 25 responses with relevant data.

Out of the 25 responses received, the top five UK cities for start-up companies were:

Northampton: 8,993

Bradford: 6,596

Coventry: 5,053

Manchester: 4,245

Glasgow: 2,960

Coventry had the largest portion of start-up companies compared to the total number of businesses with almost half of its reported businesses being start-ups – a percentage of 49% (5,053 out of 10,295).

Unfortunately, the City of London council was one of the councils unable to provide the data requested. However, it was fascinating to learn that Northampton has almost 9,000 start-up businesses – out of a total of 19,045 PAYE and VAT-based businesses, meaning 47% of the cities businesses are start-ups.

Looking at the data per capita, Northampton also ranked as the top city for start-up companies per 10,000 people with 416 businesses. On the other end of the scale, Blackpool had the least amount of start-up loans per 10,000 residents with 20 new businesses.

Overall, the examination of Government start-up loans retrieved from the British Business Bank proved extremely useful in visualising the amount paid out annually and the hotspots around the UK for start-up businesses.