The latest Nations and Regions Tracker from the British Business Bank (BBB) paints an interesting picture of Northern Ireland’s financial landscape. Northern Ireland has emerged as the UK region with the highest use of external finance among smaller businesses, holding relatively steady at 52% in 2024 compared to 51% in 2023.
Modest growth, strong underlying trends
While the increase may seem modest, the broader context reveals important insights about confidence, resilience, and the structural dynamics of our local economy.
Despite a flat demand for loans and overdrafts from major lenders, and a 17% decline in the total value of borrowing year-on-year, the average usage per capita remains the highest in the UK.
Between 2022 and 2024, Northern Ireland recorded 378 loans and overdrafts approved per 10,000 smaller firms – more than double the UK average of 169. This suggests that local businesses, while cautious, remain proactive in seeking financial tools to manage cash flow, invest in growth, or weather economic uncertainty.
Diversifying finance options
At the same time, the data highlights a persistent concentration in traditional forms of debt finance. While this does underpin business continuity, it also underscores a longer-term challenge – the need to diversify access to capital. Equity finance, a crucial driver of innovation and scale, remains underrepresented. Belfast continues to dominate what equity activity there is, accounting for the vast majority of deals and 96% of investment value across Northern Ireland, yet overall deal flow has been largely static with a marginal decline in investment value.
Confidence gap in access to finance
The duality of Northern Ireland’s position is clear. On one hand, we have the UK’s highest share of smaller businesses open to using finance to grow. On the other, a disproportionately high 27% of those firms believe it would be difficult to access that finance, compared to a UK average of 19%.
This points to a confidence gap as much as a capital one and a continued need for improved financial literacy, advisory support, and the development of a more diverse finance ecosystem.
Notably, Northern Ireland’s businesses are also leading in their use of leasing, hire purchase, and vehicle finance, with uptake at 19%, nearly double the UK average. This pragmatic approach reflects the realities of running capital-intensive operations in a smaller economy, where flexibility often trumps ownership.
Building a more resilient finance ecosystem
The overall picture is one of cautious optimism. The high use of external finance signals an economy that is active, ambitious, and increasingly sophisticated in its financial management. Yet to sustain this momentum, businesses and policymakers alike must ensure that access to a broader range of finance – from venture capital to green finance -keeps pace with demand.
