Each year the British Business Bank publishes its Nations and Regions Tracker, a comprehensive survey of how smaller firms across the UK are accessing finance.

Unfortunately, the 2025 edition reveals that at a time when investment is vital for growth, innovation and productivity, Welsh businesses are falling behind their counterparts in most other parts of the UK.

The report shows a Welsh economy that is struggling to connect entrepreneurs to the finance they need with a 7% decline in the proportion of UK small firms accessing external finance - one of the largest drops recorded anywhere in the UK alongside North East England and East Midlands.

Whilst demand for loans and overdrafts rebounded in 2024 as interest rates eased and banks became more willing to lend, the value of debt finance actually contracted in real terms in Wales. And if businesses cannot get access to working capital that allows a business to invest in staff, equipment or new market, then the likely outcome is slower expansion, weaker productivity and fewer opportunities to scale.

The equity picture is also mixed and whilst deal volumes in Wales are moving in the right direction rising by just over 7% in 2024, the total value of equity raised in Wales fell by 12.1% to £113m. This suggests that valuations for Welsh firms are falling which typically means investors taking larger stakes for the same money. Indeed, the average Welsh equity deal is less than one-third the size of the UK average.

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