A “record number” of small businesses accessed corporate finance in 2020, a major study has revealed.

The research, published by the British Business Bank (BBB), is the first to reveal how much and what finance was used for in the last 12 months.
According to the report, almost one in two (45 per cent) small and medium-sized enterprises (SMEs) applied for external financial support in 2020, compared to just 13 per cent in 2019.
Likewise, gross bank lending to this group increased by 82 per cent to £104 billion, while experts estimate this number could grow even higher in 2021.
Unsurprisingly, the figures reflect the availability of external finance in 2020 with the launch of schemes such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loans Scheme (BBLS).
Soon to be closed and replaced by the new Recovery Loan Scheme, the initiatives helped struggling businesses deal with the impact of Covid-19 – some 89 per cent of businesses who accessed external finance in the past year did so because of coronavirus disruption, with 75 per cent of those using finance to plug holes in cash flow.
The remaining eight per cent used finance to “pivot or change” their business model, while seven per cent used the cash to invest in the “digital capability” of their business.
The research also reflects the need for further support in 2021, with a third (33 per cent) of businesses expecting to “shrink” over the next 12 months.
Commenting on the study, the BBB said: “The report suggests there could be significant further demand for funding in 2021, as businesses continue to recover from the effects of the pandemic. There are positive indicators that banks currently look to have sufficient capital and could support further lending.”
Click here to access the report.
For help and advice with related issues, please get in touch with our expert corporate finance team today.