A new analysis of over 114,000 UK SMEs by Swoop Funding reveals that smaller towns—such as Barking, Stoke-on-Trent, Sunderland, and Stockport—are outpacing traditional business centres in year-on-year funding growth. While the UK economy expanded by 0.7% in early 2025, funding patterns have become increasingly decentralised, challenging the notion that only major cities drive small-business investment.
Traditional Hubs See Declines
Rather than leading the charge, established centres have experienced notable reductions in SME financing:
- Manchester: -41%
- London: -31%
- Birmingham: -80%
By contrast, Barking saw funding climb by 2,414%, Stoke-on-Trent by 4,314%, and Stockport by 6,150%, underscoring a shift toward more dispersed, localised support.
“These figures suggest that smaller cities and towns are beginning to attract more tailored funding opportunities or are better capitalising on local initiatives. While London and Manchester remain huge economic powerhouses, their relative funding growth appears more modest, perhaps signalling a shift towards decentralised support for small businesses.”
— Andrea Reynolds, CEO of Swoop Funding
Early-Stage Enterprises Secure the Most Capital
SMEs aged 0–5 years claimed over £30 million in funding—more than double the amount received by firms aged 11–15 years. This highlights the critical role of early-stage finance in enabling young companies to scale, whereas established businesses often rely on internal cash flow and existing lender relationships.
“This steep decline in funding with age isn’t necessarily a bad thing. Older businesses often have more established cash flow, stronger credit histories and existing relationships with lenders. But it does highlight how essential early-stage capital is, and just how vital funding is in those formative years for a new business” added Reynolds.
Leading Funding Types and Untapped Opportunities
Term loans and commercial mortgages dominated approvals, totaling around £62 million, while asset finance and leasing accounted for £6.8 million, and venture capital for £3.5 million. The relatively low uptake of innovation-focused or asset-heavy financing suggests many businesses miss out on specialised products.
Five Tips to Improve Your Funding Journey
Reynolds also shared practical advice for SMEs seeking capital:
- Know what you’re asking for
Tailor applications to the right product—consider asset finance, invoice finance, or equity if term loans don’t fit. - Get application-ready
Present a clear business plan, realistic projections, and up-to-date accounts. New ventures should shore up personal credit. - Strengthen your financial story
Maintain good credit, tidy records, and timely tax filings to build lender confidence. - Be strategic with timing
Apply when your books look strong—avoid seasonal downturns or tight-cash periods. - Use a matching platform
Leverage independent advisors or funding platforms to connect with lenders best suited to your needs.
For the full regional breakdown and detailed insights, visit swoopfunding.com/uk/business-funding-report/.
