Northern England Businesses Lead In Optimism Despite Funding Challenges
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Small businesses across the North of England are showing resilience and determination in their growth plans for 2025, outperforming many other UK regions in terms of confidence and ambition, according to new research from Novuna Business Finance. The findings highlight that while funding remains a key challenge, businesses in the North are prioritising recruitment, innovation, and marketing as top growth areas.
Yorkshire and the Humber: Businesses in this region are more optimistic than the national average, with 7% higher confidence compared to last year. Only 40% of businesses in Yorkshire believe growth plans would be significantly affected without funding, far lower than the national average of 57%. North East: While optimism remains strong, 57% of businesses in the North East feel achieving growth will be very difficult without funding—a 10% increase since May 2024. This signals growing concern about financial barriers in the region. North West and Cumbria: Businesses here are leading in innovation, with 31% prioritising advertising/marketing campaigns and 28% focusing on new product launches. However, 60% of businesses cite funding access as a critical hurdle, slightly above the national average.
Across the North, businesses are focusing on:
Increasing workforce: A top priority for 25% of businesses. IT modernisation: Another key area, highlighted by 23% of businesses. Advertising and marketing: Also prioritised by 23% of businesses, reflecting a push to reach new customers and markets.
While the North leads in confidence and resilience, other parts of the UK are facing greater challenges. Businesses in Central, South West, and West London, where average house prices exceed £635,000, are struggling to achieve the same momentum due to higher costs and economic pressures.
Nationally, over the last 12 months we have noted an upturn in small business confidence, specifically since July, when more business owners have predicted growth. Coupled with this, a very large number of businesses have identified new initiatives to deliver growth through the course of 2025. This is all good news but many see funding as a challenge, particularly in the North West, London and also the West Midlands. At Novuna Business Finance we recommend that established small business owners focus on getting their funding structure right. For example, reviewing smart and tailored ways to fund assets will, for many businesses, actually free up cash each month to deal with many of the day-to-day concerns – such as product development, paying suppliers, improving cash flow and funding a marketing campaign.
Jo Morris, Head of Insight at Novuna Business Finance