London’s small and medium-sized enterprises (SMEs) are set to receive new support to help navigate an increasingly complex funding landscape, with the announcement today of a dedicated finance navigation hub as part of the capital’s wider Business Support Strategy – a plan designed to make it easier for businesses to get the help they need to start, grow, and thrive.
Grow London Local Money, launching in April and delivered by London & Partners, London’s growth agency, will provide a clear entry point to information on finance and investment, alongside guidance on how to access them. The hub will be available through the Mayor of London-funded Grow London Local programme, which already supports thousands of micro and small businesses across the capital.
Funding challenges remain a barrier to growth
London is home to the largest number of SMEs in the UK, with around 981,000 SMEs, accounting for approximately 99.8% of all businesses in the city. They are critical to London’s economy, yet access to finance remains an obstacle to growth. Grow London Local data shows that 78%* of businesses across all stages of growth are currently seeking funding, while research from the British Business Bank indicates that 72% of SMEs would postpone growth plans if finance cannot be secured.
Navigation
For many businesses, as evidenced in the Business Support Strategy, the challenge is not the availability of finance but navigating the system. Complex application processes, a growing range of finance options, and more cautious lending mean support can be difficult to identify and compare – at a time when businesses are also facing rising operating costs.
Information gaps
A lack of clear information compounds the issue, with British Business Bank research showing that 69% of SMEs lack of awareness of the finance options available to them. Challenges extend beyond funding alone. Further Grow London Local data** shows that almost half (46%) of first year businesses are unfamiliar with tax and compliance obligations, leaving them at risk of HMRC fines.
Unequal access
These challenges are not felt equally across London’s business community, as women, minority ethnic entrepreneurs, and founders with disabilities continue to face structural barriers to starting and scaling businesses. For example, 49% of Asian and other ethnic minority entrepreneurs cite ‘difficulties getting finance’ as the reason for stopping work on their business idea.
Part of a wider Business Support Strategy for London
Grow London Local Money is being introduced as part of London’s new Business Support Strategy, set out by London & Partners, the Greater London Authority, with input from London Councils as part of the London Growth Plan.
The strategy brings together partners from business, funding organisations, and the public sector to streamline provision, reduce duplication, and ensure businesses are directed to support that matches their stage of growth.
New Business Support Investor Group
A new Business Support Investor Group is also being announced today, with founding members*** bringing together a range of funders of business support in the capital to improve coordination and align investment with priority interventions. These include backing underrepresented entrepreneurs, supporting SMEs to reduce carbon emissions, and responding to emerging needs like digital adoption and artificial intelligence.
In addition to finance, the Business Support Strategy focuses on priority areas including emerging technology, cybersecurity, resilience, and talent.
Mayor of London, Sadiq Khan, said: “Small businesses are the backbone of London’s economy and employ more than half of working Londoners, delivering services and products we use daily – but all too often they don’t get the help they need or are entitled to.
“I’m proud that the Business Support Strategy will help the capital’s small and medium businesses to not only start but also grow, and thrive, giving them access to the right level of support when they need it, as we work to build a better and more prosperous London for everyone.
