Start-up loans for retail businesses rose by a fifth last December, with entrepreneurs still determined despite the gloom surrounding the sector, according to new figures.
In December 2023, 32 loans were provided to retail business owners. In December 2024, this rose to 39, an increase of 22 per cent, according to The British Business Bank.
Richard Bearman, co-chief banking officer at the British Business Bank, described the number of loans as “reassuring”.
“Despite some negative data around the sector, there are entrepreneurial people out there willing to set up a retail business,” he said.
The retail sector has been awash with troubling predictions that higher national insurance contributions (NICs) and a packaging tax will exacerbate the decline of the British high street.
But the figures from the Bank are a sign that there is still positive momentum under the gloom, with retail still the most popular sector for start-up loans.
Around six per cent of loans from the Start Up Loans programme, a subsidiary of the British Business Bank, go to early-stage retail businesses.
Part of this is due to the high barriers to entry in retail: opening a retail store requires a large amount of cash on hand to set up the site and build inventory.
Bearman described the provision of early-stage financing as key for providing jobs and supporting the economy.
“If we want to revive our high streets and create globally successful e-commerce companies then it is vital entrepreneurs have access to finance and mentoring support,” he said.
Small Business Minister Gareth Thomas has similarly described the early injection of cash as “critical” and said that when small firms get the chance to grow, it can unleash a “tidal wave of opportunity”.