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Northampton leads the UK in start-up businesses, new study reveals

A new investigation into start-up loans and businesses in the UK has revealed that Northampton has the highest percentage of start-up businesses among the 50 largest UK cities. The study, conducted by BusinessComparison, also found that almost 10,000 start-up loans were awarded to businesses during the 2022/23 financial year by the British Business Bank.

Start-up loans decrease but still support thousands of businesses

The study used data from the British Business Bank and Freedom of Information requests to the councils of the 50 largest UK cities by population. It found that 9,536 start-up loans were awarded to new businesses during the last financial year, costing a combined £120 million. This was less than the previous years, with 10,372 loans awarded in 2021/22 and 11,318 handed out throughout 2020/21.

Philip Brennan, Founder and MD at BusinessComparison, said: ‘’Our study into start-up loans and businesses around the UK yielded some fascinating results. In particular, it was intriguing to learn that the amount of loans being awarded from the British Business Bank has decreased since the previous financial years, with outside factors such as interest rates and inflation, it will be interesting to see how this trend develops in the future.’’

The study also revealed that London was the region with the highest number of start-up loans during the financial year of 2022/23 with 1,491 in total. This was followed by the South East (1,217) and North West (1,091). On the other hand, Northern Ireland had the lowest number of start-up loans awarded throughout 2022/23 – with just 149. Wales also ranked low in terms of loans paid out, with 318 during the 2022/23 financial year.

Northampton is a start-up hotspot

The study also looked at how many start-up companies were in specific UK cities. Out of the 25 councils that responded with relevant data, Coventry had the largest portion of start-up companies compared to the total number of businesses with almost half of its reported businesses being start-ups – a percentage of 49% (5,053 out of 10,295).

Northampton leads the UK in start-up businesses

However, Northampton had the highest number of start-up businesses among the 50 largest UK cities – with 8,955 out of a total of 19,045 PAYE and VAT-based businesses. This means that 47% of the city’s businesses are start-ups. Northampton is followed by Leicester (46%) and Nottingham (45%) in terms of start-up percentage.

Northampton is known for its diverse economy and its strong sectors such as logistics, engineering, manufacturing, finance and business services. The city has also been recognised as one of the best places to start and grow a business in the UK by various reports and rankings.

According to Northampton Borough Council, some of the factors that make Northampton attractive for start-ups include:

  • A central location with excellent transport links
  • A skilled and flexible workforce
  • A supportive business environment with access to funding, advice and networks
  • A vibrant cultural and leisure scene
  • A low cost of living and high quality of life

The council also offers various initiatives and programmes to support start-ups and entrepreneurs in the city, such as:

  • The Enterprise Centre at Northampton University
  • The Innovation Centre at Northampton College
  • The Growth Hub at Northamptonshire Chamber of Commerce
  • The Enterprise Zone at Waterside Campus
  • The Enterprise Adviser Network at Careers Enterprise Company

Start-ups are vital for the UK economy

The study by BusinessComparison highlights the importance of start-ups for the UK economy and society. Start-ups are a source of innovation, job creation, competition and social impact. They also contribute to regional development and diversity.

According to the Office for National Statistics (ONS), there were 672,890 new business registrations in 2020/21 in the UK – an increase of 24% from 2019/20. This shows that despite the challenges posed by the Covid-19 pandemic and Brexit, many people have pursued their entrepreneurial dreams and ambitions.

The government has also recognised the value of start-ups and has provided various forms of support and incentives for them, such as:

  • The Start Up Loans scheme
  • The Future Fund
  • The Seed Enterprise Investment Scheme (SEIS)
  • The Enterprise Investment Scheme (EIS)
  • The Research and Development (R&D) tax credits
  • The Patent Box scheme

These schemes aim to help start-ups access finance, attract investment, reduce tax liabilities and encourage innovation.

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