Frazer Habershon
As we approach the sixth month of 2025, it is hard to say whether the business environment is improving, declining or maintaining a steady state, with conflicting reports offering what could best be described as a mixed picture. There are, however, some reasons for optimism. In comparison to April 2024, we have seen a 5% increase in the volume of Start Up Loans taken out by entrepreneurs in the UK in April 2025. The growth in finance delivered reflects the resilience and entrepreneurial nature of the business community in the UK, with these early-stage businesses looking to establish and grow their companies, despite uncertain economic circumstances.
With every challenge comes opportunities. As new tariffs potentially disrupt global trade, for example, there is a growing interest from consumers and businesses alike in ‘buying British'. In the weeks since the US government announced tariffs, the UK's leading manufacturing trade organisation Made in Britain has reported a 20% surge in membership applications. CEO John Pearce credits the upswing in applications with the desire to celebrate and showcase British-made products in response to the uncertainty created by tariffs across the pond.
Predating recent events there been an underlying shift to shop more locally, partly driven by sustainability concerns, as well as a desire to reinvigorate the British high street. The current economic climate has the potential to accelerate this trend. The National Institute of Economic and Social Research estimated that 10% US tariffs on the UK could have an inflationary impact.
Start Up Loans-supported businesses are more typically UK-focused and skewed towards sectors that benefit from increased UK consumer spending.
One example of a company capitalising on this shift towards shopping local is Proper Cornish Milk, a micro-dairy farm and milk delivery business set up by husband-and-wife team Matt and Tessie Horton. The finance, taken out via Enterprise Fund totalling £27k, was used to build a processing room and buy equipment including bottling machines and fridges. The duo also used the money to buy their herd of six cows - Daisy, Poppy, Karen, Odette, Petal and Dixy.
Tessie said: "I think people are starting to shift away from buying everything from big supermarkets. More and more, we're seeing people wanting to support local businesses and care about where their produce comes from. For us, we wanted to do dairy farming in a different, more sustainable way and shopping local is a big part of that. The Start Up Loan was a huge help - it gave us the funds we needed to buy the equipment and initial herd to get the business up and running."
Similarly, Frazer Habershon spotted a gap in the market as there were no local options for coffee that was ethically sourced throughout its supply chain, a cause he cares deeply about. Frazer then used his skills to transform a used barbecue into a coffee roaster, which ultimately led him to open his own drive-through coffee shop in Sheffield.
"As the world has globalised and supply chains have become more complex, it's become harder to guarantee ethical practices at every stage of production. This is something I care deeply about, which led me to start roasting my own coffee.
"I think the ethos behind the business has really resonated with consumers and other small businesses, as people are becoming more aware than ever of the wider supply chain practices behind the products they consume. We have now opened a drive-through store and grown our roasting operations to meet increased demand. The loan was key to being able to scale my business."
As a government-backed initiative, Start Up Loans is dedicated to providing vital support to smaller businesses.
From starting a new business or acquiring additional finance to continue to scale up, over 900 entrepreneurs took out Start Up Loans in April alone, a 5.4% increase on last year's figures. This totalled very nearly £12m in finance delivered to resilient entrepreneurs in the UK, who are looking to start their own business or continue with growth plans despite an uncertain economic terrain.
What is evident in the current climate is the pressing need to continue supporting and safeguarding the smaller business ecosystem in the UK. At its core, UK growth is driven by local success, with smaller businesses contributing significantly to regional economies and job creation.
The UK remains resilient and adaptable, as demonstrated by the continued growth in loans taken out by entrepreneurs despite economic uncertainty. Start Up Loans remains steadfast in its commitment to financing the brilliant ideas and entrepreneurial spirit that underpin the nation's small and micro-businesses.
