East London is breaking away from the rest of the capital to become the centre of entrepreneurship, as new data revealed that the district has received a total of £23.2m in funding from The Start Up Loans Company since 2012.
The government-backed programme was founded in 2012 and recently hit a landmark figure of £250m in lending for new enterprise. Some £66.3m has been received by London startups, of which over third has been snapped up by entrepreneurs in East London.
Lending data from The Start Up Loans Company showed startup funding in East London was almost three times higher than funding for enterprise based in the north of the city. Entrepreneurial culture runs comparatively low in North London, where startups have received just £8.3m in loans in the last four years.
The East London borough of Hackney appears to have established itself as the startup capital of the city. The Start Up Loans Company has provided one loan for every 343 residents in the borough to start a business since 2012, reaching a total figure of £4.9m.
Commenting on the figures, Tim Sawyer, CEO at The Start Up Loans Company and one of our Small Business Decision Makers for 2017, declared that “the East End’s famous entrepreneurial spirit is alive and well”, and backed London to produce more startup success stories through the government-funded programme.
“Great business ideas can start anywhere, on the tube, in the pub or in the kitchen. It’s a scary decision to take a chance on your business but it’s a shame to let creative ideas go to waste.
“London’s global business reputation is impressive – and we can help to make it even better,” he said in a statement.
However, although The Start Up Loans Company has allocated over a quarter of its total lending to London-based enterprise, further research has suggested that the capital is failing to provide a natural environment for ambitious entrepreneurs.
A new ranking produced by business support website Informi has placed London as the eighth best UK city to start in business in 2016 – behind the respective top three of Brighton, Cambridge and Leicester.
The table was calculated by factors that are considered crucial for startup survival, such as house prices, the density of existing small companies in the area and digital connectivity.
Despite startup owners in London having seemingly more opportunities to fund their venture, high property prices and only moderate broadband speeds have meant that new business closure remains high.
Brighton remained the most business-friendly city for entrepreneurs for a second year running due to its superfast broadband connectivity and low pollution levels, according to the research.
Informi’s Darren Nicholls used the new rankings to highlight the health of enterprise outside of London, stating that “entrepreneurial spirit is as strong as it has ever been”.
“New businesses can be found across every region and industry, bringing new jobs and prosperity and growth to their local economies,” Nicholls said in a statement.
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