Small Business Finance Markets Report 2021

Our Small Business Finance Markets 2020/21 report (.pdf - 8.85MB) provides a timely and comprehensive review of finance markets for smaller businesses.

This year, the report focuses on the impact of Covid-19 on small business finance markets and the implications for 2021, and the use of finance by smaller businesses and market developments in finance products.

Four themes provide the background to the seventh edition of the Small Business Finance Markets report:

• First, businesses shifted away from most traditional forms of external finance to utilise government-backed finance schemes and support. The utilisation of bank overdrafts, credit cards and asset finance all fell, while the only increase in the usage of traditional repayable external finance was seen in loans.
• Second, smaller businesses have faced a lot of uncertainty in 2020 – with the smallest businesses hardest hit. A large proportion of businesses have been forced to seek finance due to the impact of Covid-19, most often to help with cashflow.
• Third, as businesses continue to recover from the effects of the pandemic, there could be significant further demand for funding in 2021.
• Fourth, the report finds that, due to record cash balances and increasing debt levels, there are both a sizeable number of smaller businesses in a position to borrow further in 2021 and a sizeable number likely to struggle with debt repayments.