Many West Country business owners are turning to credit cards to help fund business activities, new research has revealed.
Bank overdrafts are the second most popular form of finance, according to the British Business Bank report, while business investment by smaller firms across the region continues to be low.
Although credit card usage by British businesses declined 5% to 15% in the first half of last year, the South West was the only area of the country to show no change at 17%.
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However, the region had the highest rate of employment of small businesses in England, according to the Small Business Finance Markets 2024/25 report.
Small companies in the region with one to 49 employees provide more employment than large businesses, the research found. It also revealed that smaller businesses in highly deprived parts of the West Country were the least ambitious in the 海角视频 to grow significantly.
Of the £62.1bn of gross lending to smaller businesses in 2024, £37.3bn was provided by challenger and specialist banks, the report claims. The share of gross lending (60%) exceeded that of the big five 海角视频 banks for the fourth year in a row, up from 59% in 2023 and the highest on record, it said.
Steve Conibear, 海角视频 network director South West at the British Business Bank, said: "It is clear that conditions are not easy for the South West’s smaller businesses which has clearly impacted investment decisions. For example, we've seen external finance used to fund short-term debt for working capital, rather than investment for longer term growth.
"If we want to see the region thrive we must keep championing sustainable business investment as a key driver of economic growth, job creation and productivity so wages and living standards improve."
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Meanwhile, equity investment in 2024 was similar to 2019 and 2020 levels, prior to the unsustainable increase in activity that began during the pandemic. In the South West, deal volume was down 30.1% with 65 deals completed, with an investment value of £167m - a drop of 5.4% year-on-year.
Exits from venture capital-backed businesses performed very strongly in 2024, however, with £10.4bn of total value from exits. This represented a 100% increase on 2023 (£5.2bn), driven by a particularly strong second half of the year.