Financing Growth: Unlocking the South West’s potential

EY predicts it will become the UK’s second fastest-growing regional economy, supported by thriving high-value sectors such as technology, renewable energy, and professional services. Bristol, in particular, is set to be one of the fastest-growing cities outside London. These are encouraging signals that show the South West is well placed to compete with other regions across the UK

Across the South-West area more than 133,000 businesses contribute £81.3 billion in GVA, around 5% of the national economy. Over the past five years, the number of businesses has expanded by almost 5%, the strongest growth of any UK region. SME density is also among the highest in the country, with more than 1,100 small businesses per 100,000 adults, compared with closer to 750 in some parts of the North. This entrepreneurial base demonstrates the region’s dynamism and resilience.

However, ambition and ideas cannot, on their own, deliver lasting growth. For many SMEs, the biggest challenge remains access to finance. Despite accounting for half of the UK’s SMEs, regions outside London and the South East attract only around 15% of venture capital and private equity investment. That imbalance represents a significant funding gap, one that continues to hold back promising firms across the South West.

There are, however, signs of progress. In 2024, businesses in the South West attracted more than £580 million in equity investment, with Bristol alone accounting for nearly £94 million. Deep-tech ventures, spanning advanced AI, biotech, and materials science, made up almost half of this total, aligning the region with fast-growing global sectors. Angel networks are also expanding, with new groups emerging in North Devon, Cornwall, and Cheltenham, giving earlier-stage companies more opportunities to secure vital capital.

For SMEs, traditional bank lending remains a route for many, but it is increasingly complemented by alternative sources such as challenger banks and asset finance providers. Equity investment, whether through venture capital firms, regional angel networks, or funds dedicated to scale-up businesses, can give entrepreneurs the backing and expertise needed to accelerate growth. Crowdfunding platforms are also playing a role in enabling firms to raise smaller sums while building a community of early supporters.

For businesses with export potential, trade finance can provide the working capital required to fulfil international orders. Each pathway offers distinct benefits, but what unites them is their ability to help businesses overcome the growth barriers that often hold back smaller firms.

Securing that funding is about preparation as much as it is about opportunity. From our experience at Maven, SMEs that succeed in attracting investment tend to share several characteristics. Firstly, they present a clear and credible business plan, backed by realistic financial forecasts that demonstrate both ambition and commercial viability.

Secondly, they show a strong understanding of their market, knowing who their customers are, what differentiates their offering, and how they plan to scale. Thirdly, good governance and a capable leadership team are critical. Investors want to see that a business not only has a compelling idea, but also the management strength to execute it.

Finally, SMEs that can demonstrate their awareness of broader trends, whether that is digital adoption or sustainability, are more attractive to funders who are looking for long-term relevance as well as short-term growth.

Even so, many companies continue to face hurdles when it comes to securing capital at the right moment. Targeted initiatives can help bridge this gap. One example is the South West Investment Fund, launched by the British Business Bank, with Maven Capital Partners managing its equity finance portion across Bristol, Bath and North East Somerset, North Somerset and South Gloucestershire, and Wiltshire including Swindon.

The fund provides between £150,000 and £5 million to ambitious SMEs and has already supported businesses such as Kelpi, which is developing seaweed-based alternatives to plastics, and Tixserve, which has secured £1.85 million to expand their operations in the South West.

At Maven, we have seen first-hand the impact that access to finance can have, but the solution cannot rest on any single programme. Businesses need to be aware of, and confident in, the full spectrum of funding options available. The more diverse and flexible the financing ecosystem becomes, the better placed the region’s entrepreneurs will be to seize opportunities to invest in innovation and compete national or international scale.

The South West is rich in entrepreneurial ambition. With its fast-growing business base and sector strengths, alongside increasing investor attention, the region is well positioned to thrive. If access to finance can keep pace with ambition, the South West will not only meet its growth forecasts but could become a national leader in innovation and sustainable business.