Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of trends in the regional spread of business debt in (a) each of the last five years, (b) during the covid-19 outbreak and (c) during the cost of living crisis.

The Department monitors regional trends in business lending through the British Business Bank (BBB), the SME Finance Monitor survey, and the trade associations UK Finance and Responsible Finance. The BBB’s three regional funds support access to debt and equity finance in Cornwall, the Northern Powerhouse and Midlands Engine, including Coventry.

The regional spread of business debt broadly reflects national demand for business lending and the regional distribution of the business population. Differences within regions are more significant, with Community Development Finance Institutions playing a valuable role in enabling access to debt finance for businesses in under-served areas.

According to the SME Finance Monitor, the proportion of all SMEs using external finance was 38% in Q2 2022, down from the 45% using finance in Q2 2021 and in line with pre-pandemic levels. Use of debt finance is higher for SMEs trading internationally and those with plans to grow. The majority (86%) of SMEs are in the category of ‘happy non-seekers’ of finance, meaning that they have either no debt or a level of borrowing that they consider sufficient for their needs.