Demand for starting a business remains strong

It’s easy to feel anxiety about the current state of the world, with geopolitical issues, and their effect on the UK economy, dominating the headlines. And those issues do affect business confidence. The Federation for Small Businesses’ recent Small Business Index (SBI) for example, which tracks how optimistic small firms are feeling, registered at -53 in Q1 2026.

So, clearly, small businesses face a lot of challenges. Yet in our own Start Up Loans data we see reasons for optimism, with empirical evidence that people in the UK – and it is all across the UK – want to use finance to start or grow an early-stage business.

The British Business Bank’s recent Small Business Finance Markets report found two contrary findings – that, although business confidence about the economy remained low, a higher proportion of smaller businesses in 2025 expected to grow. A mixed picture, to say the least.

The report also found that the proportion of UK adults actively starting, running or planning new businesses (36% in 2024) was the highest proportion since 1999, and relatively high by international standards. There were almost 314,000 business births in 2025, 1% higher than in the previous year. This is also up from 2023, but lower than peaks seen in 2019 and 2021.

Our Start Up Loans figures also offer a reason to be optimistic about the entrepreneurial spirit in the UK. When comparing March 2025 to March 2026, the volume of Start Up Loans UK businesses received increased by 11.6%. And this is not an anomaly – Start Up Loans also saw a 9% rise in loans to start up and early-stage businesses in 2025.

Businesses across the whole of the country benefit from our loans. As a flavour, in March 2026, those based in Yorkshire & The Humber received £1.07m, while in the West Midlands it was £1.24m, Scotland £945,000, North West £1.14m, South East £1.83m and South West £1.51m.

In light of this data on the growth in demand and delivery of Start Up Loans, we asked two of our Start Up Loans Ambassadors about setting up a business and why they think, despite everything going on in the UK and globally, there’s demand for Start Up Loans:

Christian Heath, founder of Sunnyside Drinks says: “The surge in Start Up Loans reflects a fundamental shift in our professional culture. The era of the ‘job for life’ is behind us – we are now in the age of the ‘slashie’ career and the side-hustle. Because the barriers to entry have never been lower, anyone with a laptop and a vision can technically start a business. This democratisation of entrepreneurship is driving volume, but it’s the shift in consumer values that is driving the need for these new businesses.”

Anna Lloyd, founder of Bwblin has a similar view: “I think more people are recognising that traditional career paths no longer feel as fulfilling as they once have, so entrepreneurship is becoming a more attractive option. At the same time, the barriers to starting a business have lowered significantly and you can build a brand, test products and reach customers online with relatively little infrastructure. However, getting a business off the ground still requires capital, and for many founders, Start Up Loans provides an accessible route to bridge that gap.”

We also asked Rebecca from Robinson Vets, a very recently set up business, why she wanted to set up a business in the current environment: “Starting up in the current climate has not been the easiest choice: borrowing is more expensive, fit-out and equipment costs remain high, and households are thinking carefully about every pound they spend. But that made us feel even more strongly that there is space for a well-run local practice that offers real value, builds trust, and stays focused on what matters most to clients and their animals. For us, good care and good business go hand in hand — a sustainable business is what makes excellent care possible.”

The experiences of Christian, Anna and Rebecca show that there is a desire out there, all across the UK, to set up a business. We see Start Up Loans going to businesses all the way from the Isle of Harris down to the Isle of Scilly. While a number of reports suggest business confidence is low, that doesn’t seem to be translating into less need for Start Up Loans – it’s the opposite and we’re seeing more demand from entrepreneurs who want to turn their business ideas into reality.

So, if this is the year you decide to set up your first business, look at all your financing options, create your plan and when you’re ready, make your application to the Start Up Loans programme. We are there to give you the support you need – not just finance but also wraparound support such as mentoring. We want UK entrepreneurs to start up and succeed and are determined to play our part in making that happen.

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