Growing importance of supporting diverse businesses in Yorkshire: Cat Smith

Recent economic volatility has impacted businesses across the UK, from Brexit to the pandemic and now geopolitical unrest and subsequent supply chain disruption. Amid this disruption, the need for targeted support for small businesses has come into sharp focus.

However, there are nuances within the small business community that must be addressed.

According to data from the British Business Bank (BBB)’s Small Business Equity Tracker 2023, diverse business owners receive a disproportionately smaller amount of support.

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The report found the share of total equity investment by value for all-female founder teams remained stagnant over the last decade, with women receiving only 2 per cent of funding. and only 10 per cent of first-time equity deals going to all-ethnic minority teams.

Cat Smith shares her expert insightCat Smith shares her expert insight
Cat Smith shares her expert insight

From a Northern lens, Yorkshire and the Humber accounted for just 3 per cent of small business equity investments in Q1-Q3 2024, according to the BBB’s recent Small Business Finance Markets report. After a strong 2022, the North of England more widely accounted for 12 per cent of total deals. However businesses in London still dominated SME finance.

The need for further investment into diverse Northern businesses is clear, and it holds several benefits for the region. Firstly, diverse business founders bring a variety of skills, perspectives, and market insights that can help businesses compete on an international stage.

Investing in diverse business owners also increases diversity within business sectors. With fresh ideas and different perspectives, we’re more likely to create a business ecosystem that comprises a range of different sectors.

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Without this crucial investment in the region, we miss out on the opportunity to support strong economic growth by fostering innovation and creating job opportunities. By actively supporting diverse businesses, we can address regional economic disparities, reducing inequality and promoting a fair distribution of finance to Northern SMEs.

This investment also contributes to greater cultural enrichment within the region. Our region is a vibrant mix of cultural diversity, we only have to look to Bradford being honoured as the City of Culture for 2025 to evidence local cultural heritage and accolades. Supporting our cultural cities should go hand in hand with supporting diverse businesses that reflect the differing identities across Y&H.

This isn’t to say great progress hasn’t already been made. February saw the launch of a new partnership between BBB and Lifted Ventures in Leeds – a network solely dedicated to connecting diverse Northern founders with angel investors. We also continue supporting businesses through our Start Up Loan scheme, and the launch of the second phase of the Northern Powerhouse Investment Fund (NPIF II).

While there is still a level of uncertainty within the UK economy, businesses should feel empowered to seek finance.

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As a Northern lass born and bred in Halifax, supporting diverse businesses in Y&H is a passion of mine. Not just as a matter of social responsibility, but also an investment in the economic, social, and cultural well-being of the community.

There is a lot of work to be done, but with powerful initiatives and funding available, the future is looking bright.

Cat Smith is Senior Network Manager for Yorkshire and the Humber for the British Business Bank

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