'More work needs to be done to raise awareness': Northern Ireland tops UK with dramatic 83% surge in equity investment deals, rising sharply to £90 million
Equity investment surge and resilient start-up growth put Northern Ireland top of the UK, but gaps in access to finance persist
Northern Ireland recorded the strongest growth in equity investment anywhere in the UK in 2025, according to the British Business Bank’s latest Small Business Finance Markets report.
The value of equity deals in the region rose sharply to £90 million across the first three quarters of the year — an increase of 83% compared with the same period in 2024 — while the number of transactions climbed by 35%. Both figures represent the largest increases of any UK nation or region.
Across the wider UK, the report highlights improving conditions for business finance. Gross lending to small and medium-sized enterprises rose by 9% to £68 billion in 2025, the second-highest level recorded in the past 13 years, behind only the pandemic-era peak in 2020. The rise reflects gradually easing credit conditions over the course of the year.
There are also signs of renewed business activity. A total of 314,000 new businesses were launched across the UK in 2025, a modest 1% increase on the previous year, contributing to overall growth in the business population. Northern Ireland accounted for 6,115 of those start-ups.
The report points to strong resilience among Northern Ireland firms. Of businesses established in 2019, 43% were still operating five years later—well above the UK average of 38% and second only to the South West of England.
Despite this strength, the data suggests many firms are relying on finance primarily to maintain stability rather than drive expansion. Around half of UK small businesses used external finance in 2025, with credit cards and overdrafts among the most common tools, alongside leasing and hire purchase agreements.
Awareness of funding options is improving, however. Nearly two-thirds of smaller businesses said they knew where to find information on different types of finance, an increase on the previous year that indicates growing understanding of the range of support available.
The structure of the lending market is also continuing to evolve. Challenger and specialist banks now account for the majority of SME lending, surpassing the traditional big five banks for the fifth consecutive year. Their share of lending has grown significantly over the past decade, alongside the expansion of non-bank lenders, which together now provide more than two-thirds of SME finance.
Innovation is a key driver of investment trends, with artificial intelligence attracting a substantial share of equity funding. AI firms raised £2.9 billion across 323 deals during the first three quarters of 2025, representing around two-fifths of total UK equity investment.
Susan Nightingale, director Devolved Nations, British Business Bank said: “It is positive to see the increase in the number and value of equity deals in Northern Ireland, but overall, more work needs to be done to raise awareness of the diversity of finance.
“Smaller businesses here have shown great resilience over the last five years, and let’s not forget this period accounts for the pandemic. They have shown a determination to succeed and thrive, creating jobs and investment right across Northern Ireland.
“Help is out there for those seeking finance to continue their business journey. Since its launch, just over two years ago, the £100 million Investment Fund for Northern Ireland has directly invested £30 million into local firms and in December the fund was bolstered by Invest NI with an additional £29.2 million for the debt financing arm of the fund.
“For Northern Ireland entrepreneurs it’s important they have awareness of and access to the right kind of finance to help them on their journey whether that’s starting up or scaling up. This is something the British Business Bank is focussed on.”
Significant challenges in accessing finance remain for some under-represented groups and geographical areas being tackled directly by the British Business Bank Businesses located in rural and coastal areas, female and Ethnic Minority-led businesses face greater challenges. There is positive evidence to suggest that increased diversity of senior decision makers leads to a greater likelihood of diverse founders being able to secure investment.
The British Business Bank has recently put in place interventions to address these challenges, including increased commitments for its Nations and Regions Funds, Community ENABLE Funding and additional resources to support a greater diversity of fund managers and founders.