British Business Bank reports how pivotal first Covid lockdown was

Five years since the first Covid-19 lockdown, new data from Start Up Loans, part of the British Business Bank, reveals a significant increase in entrepreneurs securing finance to launch their businesses.

Since the pandemic began, the number of first-time loans issued by the programme has risen by 21% compared to the five years prior. This growth amounts to a £176 million increase in total loan value, while the average loan size has grown by 19%, increasing by £2,143.

2020: A TRANSFORMATIONAL YEAR

Despite the challenges small business owners faced during the pandemic, 2020 marked a turning point for UK startups. In the financial year leading up to the first lockdown, 8,652 Start Up Loans were issued to UK businesses. The following year, this rose to 11,322—a 31% increase. Since then, loan volumes have consistently remained above pre-pandemic levels.

The lockdowns forced many to reconsider their career paths, prompting a wave of individuals to take the leap into entrepreneurship. One such entrepreneur is Candice Mason, who used a Start Up Loan to launch her business, Mother Cuppa.

During the pandemic, Mason experienced early menopause, which led to significant health challenges and prompted her to rethink her future. Inspired by her passion for holistic teas, she turned her personal remedy into a business.

She said: “I had been brewing my own teas to combat my health issues for years. When the pandemic broke out, it made me stop to think about what I really wanted to do with my life. I felt a strong sense of ‘if not now, when?’.

“At first it was scary, but I have been able to take my passion and turn it into a viable business, which is the most rewarding thing. I’ve faced challenges over the years, but the business is now going from strength to strength.”

ETHNIC MINORITY BUSINESS OWNERS

The five years since the first lockdown have also seen a notable increase in Start Up Loans issued to ethnic minority entrepreneurs. The volume of loans to recipients from ethnic minority backgrounds increased by 5.39%, reflecting the programme’s broader reach in supporting underrepresented founders.

In terms of age demographics, loan recipients remain diverse:

10.55% of Start Up Loans have been issued to entrepreneurs aged 18-25
12.22% have gone to those aged 50 and over
The largest group of borrowers, 56%, are aged 31-49

These figures show that the age profile of loan recipients has remained consistent before and after the pandemic.

LASTING SHIFT IN ENTREPRENEURIAL THINKING

Richard Bearman, co-chief banking officer at the British Business Bank, highlighted the pandemic’s impact on the Start Up Loans programme and entrepreneurship more broadly:

*”When I think about the Start Up Loans programme, the pandemic was a real pivotal moment. So often I meet business owners and their stories start with how lockdown was the chance to stop and really think about what they wanted to do and achieve.

We saw a huge increase in the number of loans during 2020 and into the early part of 2021. Although some of that demand for finance has understandably cooled off, we still see a lot more people seeking Start Up Loans funding for a business. In that respect, the shock of lockdowns could well have contributed to a change in how potential business owners thought about the opportunities of entrepreneurship.”