We’re making a pledge to small businesses in the North worst affected by the pandemic

We're pledging to lend £220 million to small businesses in the North of England by the end of 2023 to help them recover from the pandemic.

23 October 2020

North set to lose more years of economic growth than the rest of England

We’ve done some analysis which indicates that the Northern Powerhouse is forecast to lose between 6 and 14 years worth of growth because of the economic impact of the pandemic – this is more than the rest of England.

We're therefore pledging to lend £220 million to small businesses in the North by the end of 2023 to help them recover.

What the data says

  • The North East, North West and Yorkshire and the Humber have been forecast to lose 11.7%, 11.2% and 12% of GVA respectively in 2020.
  • Analysis of the region’s GDP statistics from previous years suggests that these falls would erase the economic growth made between 2004-2018 in the North East, 2012-2018 in the North West and 2010-2018 in Yorkshire and the Humber.
  • In terms of total years of growth lost, these regions make up three of the top six in England.

Northern regions have the biggest proportion of businesses in worst hit sectors

According to our analysis of ONS data, the Northern regions are also home to the highest proportion of businesses in the ‘Accommodation & food services’ and ‘Arts, entertainment, recreation & other services’ sectors – the two sectors identified by the ONS as being the worst affected by the pandemic between January and July.

What the data says

  • In the North East 16.4% of businesses fall into these sectors, with the North West having 12.8% and Yorkshire and the Humber with 13.5% of businesses in these sectors.
  • According to the most recent data from HMRC, these sectors have also seen the highest proportion of jobs furloughed. In the arts, entertainment and recreation sector, 45% of employees were on the furlough scheme at the end of July, and 43% of workers in accommodation and food services were furloughed.

We’re pledging £220 million to small businesses in the North

iwoca is pledging to lend £220 million to small businesses in the North by the end of 2023 to help them recover from the pandemic.

“Small businesses around the country have been hit hard by the pandemic,” said Christoph Rieche, our CEO. “But it's clear that some parts of the country - particularly the North - are suffering disproportionately. We want to support business owners in these areas to give them the best chance of recovery over the next few years. With this financial commitment we hope that we can drive up growth and help businesses across the North thrive.”

In 2018, we pledged £100 million for small businesses in the North and we achieved this almost a year ahead of schedule. Over the past two years we’ve funded nearly 3,000 small business customers in the North and in December 2019 we opened an office in Leeds, reaffirming our commitment to the region.

As the Government champions a levelling up agenda, our pledge will help small businesses across the North grow and contribute to the UK’s economic recovery.

"“We hope that we can drive up growth and help businesses across the North thrive.” (Our CEO – Christoph Rieche)"

Alexander Alfieri is the founder of North West based online antique jewellery retailer – Butter Lane Antiques – and an iwoca CBILS customer. He explains how his business has been affected by the pandemic, and what he sees in the future :

“We were in such a good phase of growth pre pandemic,” says Alex. “As a business we took five steps forward and then this happened and left us six steps back. But it's just the nature of running a small business. It wasn't all doom and gloom at all, but it was tough, and there were some really squeaky moments. We ducked and dived, got our heads back on, and started thinking of different ways to get things back on track, which – through social media – we did. There were some really positive adaptations that came out of it: our podcast was born, and I had to become incredibly more specific with the stock we were buying and the manner in which we were selling it.”

If you’re a small business owner and you’re looking for finance, you can apply for a loan with us through our Flexi-Loan or the Coronavirus Business Interruption Loan Scheme.

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Charlotte is a PR & Communications specialist at iwoca.

Article updated on: 23 October 2020

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