Established businesses driving UK growth but face £65bn finance gap

A new report from Oxford Economics has highlighted the significant contribution that established businesses make to the UK economy, while warning that many continue to face barriers accessing the finance needed to support growth.

Commissioned by Allica Bank, the report finds that businesses employing between five and 250 people account for 35% of private sector employment and 37% of private sector turnover across the UK, despite representing only a small proportion of the overall business population.

The research argues that these firms – described as the UK’s “real economy” businesses – play a particularly important role outside London and the South East. Established businesses account for 44% of private sector employment in Wales, 39% in Scotland and the South West, and 38% in both the North East and North West. In rural areas, they support around half of all private sector jobs.

The findings come as policymakers continue to focus on regional economic growth and productivity improvements across the UK.

However, the report also highlights ongoing challenges around access to finance. Allica Bank points to a £65 billion SME lending gap that it says has accumulated over the past 25 years, limiting the ability of many established businesses to invest, expand and create jobs.

Oxford Economics examined the wider economic impact of Allica Bank’s lending activity and estimated that finance provided by the bank enabled an estimated £8.4 billion contribution to UK GDP during 2025, supported 118,000 jobs and generated £2.1 billion in tax revenues.

According to the analysis, every £1 million lent by Allica Bank enabled an estimated £2.6 million contribution to GDP, supported 36 jobs and generated £700,000 in tax revenue. The report also found that almost four-fifths of the GDP and employment impact supported by the bank’s lending occurred outside London and the South East.

Richard Davies, CEO of Allica Bank, said established businesses remain one of the UK’s most important but often overlooked sources of economic growth.

“Established businesses are one of the UK’s most important but underappreciated sources of growth,” he said. “They make up a small share of the business population, but account for more than a third of private sector employment and turnover.

“But too many are still being held back by being overlooked – whether that’s by banks, policymakers, or in the public discourse more generally. This report shows what happens when established businesses are given the support they need.

“At Allica, we’re seeing our lending increasingly concentrated in high-growth established businesses that are turning finance into real economic impact. The GDP contribution enabled by our lending grew by 44% last year, ahead of lending growth of 35%. That matters, because when these businesses grow, the benefits are felt far beyond the business itself – in local jobs, stronger supply chains and more resilient communities across the UK.

“If the UK is serious about growth, it needs to get serious about backing established businesses. Because when established businesses grow, the whole economy grows with them.”

The report includes examples of businesses that have used finance to support expansion and investment.

Among them is Scottish renewable energy manufacturer SD Wind Energy, which secured funding to expand its production facilities in Ayrshire and increase manufacturing capacity for export markets.

Toshiro Urushitani, CEO of SD Wind Energy, said: “For a business like ours, access to the right finance at the right time makes a real difference. It means we can invest in the future, create skilled jobs locally and grow internationally while keeping our roots firmly in Ayrshire.”

Another example is Yorkshire-based Dales Bike Centre, which used funding to develop new glamping accommodation alongside its cycling and hospitality offering.

Stu Price, co-owner of Dales Bike Centre alongside his wife Brenda, said: “Established businesses like ours are often built over many years, rooted in their communities and doing much more than just serving customers. We employ local people, work with local suppliers and help bring visitors into the Yorkshire Dales, but that doesn’t always fit neatly into the way traditional banks look at lending.

“What made the difference with Allica Bank and the help of our relationship manager Andy Castle was that they took the time to understand what we’re building here. This has been our first full summer with the new glamping pods and they’re already hitting our forecast turnover target, helping secure our future and all the benefits this business brings to a rural community.”

Allica Bank, which received its banking licence in 2019 and focuses exclusively on established businesses, has now lent more than £3.7 billion to UK SMEs.

The report concludes that improving access to finance for established businesses could play an important role in supporting regional development, job creation and wider economic growth across the UK.