Five years since the first Covid 19 lockdown, data from Start Up Loans shows there has been a surge in aspiring entrepreneurs taking out finance to bring their businesses to life.

In the five years since the start of the pandemic, there has been a 21% increase in the number of first loans delivered by the programme, which is part of the British Business Bank, in comparison to the five-year period prior.*

This amounts to a £176m increase in the total value of loans between the two periods. The average loan value to entrepreneurs also increased by £2,143, or 19%.

Start Up Loans data on loan volume applications shows 2020 was a potentially transformational year for UK startups despite the challenges many small business owners faced. In the financial year that ended just around the time lockdown was first introduced, 8,652 Start Up Loans supported UK start up businesses. The following year this rose to 11,322, a 31% increase, and numbers have remained higher than pre-pandemic levels ever since.

The pandemic lockdowns brought normal life to a temporary halt and offered a unique opportunity for people to rethink their futures and pursue their dreams. This prompted many to seek alternative careers, like business owner Candice Mason, who took out a Start Up Loan to follow her aspirations of running her own company.

During the pandemic, Candice experienced early menopause, leading to health challenges that caused her to reevaluate her life path. She decided to leverage her passion for home-brewing holistic teas, which helped alleviate her symptoms.

Candice Mason, founder of Mother Cuppa, 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.”

The five year period since the first lockdown has also seen a significant increase in Start Up Loans finance provided to Ethnic Minority start up and early-stage business owners. The volume of loans to recipients from an Ethnic Minority background increased by 5.39% versus the five years up to the first Covid lockdown. 

About one in 10 (10.55%) of those getting finance are aged between 18-25, while 12.22% are aged 50 or over; so together these two age groups account for more than a fifth of Start Up Loans. The largest age group are those with more career experience, with 56% aged 31-49 years old.

The age profile of business owners using Start Up Loans to finance their start up or early-stage business has remained consistent pre and post Covid lockdowns.

Richard Bearman, Co-Chief Banking Officer, British Business Bank: “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.”

Start Up Loans is a government-backed programme that offers fixed-interest loans and post loan support such as mentoring to entrepreneurs in the UK. Since its inception in 2012 the programme has delivered more than 120,000 loans totalling over £1.2 billion.