Family Business Scale-ups: Breaking Barriers to Growth
The challenges to growing and scaling family businesses
Accessing finance and growth capital
providers such as BGF (42%), corporate venture funds (34%), institutional equity (33%), public equity (32%) and business angels (31%). Overall, scale-ups and mid-market firms find it more difficult to secure investment from UK investors than from international investors (36% vs 25%). Family businesses face similar challenges, encountering a range of barriers when seeking UK funding. Four in ten report difficulties linked to the scale of funds available, while three in ten point to the limited risk appetite of UK funders, the lack of broader support offered alongside investment, and a tendency towards short-termism that reduces willingness to commit to longer-term investment. “Overall, scale-ups and mid-market firms find it more difficult to secure investment from UK investors than from international investors”
sector finance offerings are joined up and a similar proportion are aware of recent changes made in the capital markets, including PISCES and listing reforms. More than half (54%) are also confident that the activities under way to bridge the growth capital gap by unlocking pension funds and institutional monies, and in the development of things such as the new National Wealth Fund and British Growth Partnership Fund, will reach them. The primary funding source used by mid-market and scaling family businesses is traditional debt from a bank or similar institution, with 61% currently using this type of finance; a further 13% are planning to use debt finance. They are less likely to be using other types of growth capital but there is typically a desire to use more finance in the future. One-third (33%) are currently using Trade Finance, including from UK Export Finance, while only 17% are using Venture Debt or Mezzanine Funding, but three in ten leaders are planning to use each of these sources in the future. When it comes to Equity, 27% of mid-market and scaling family businesses have obtained funding in this way, and a further 31% are considering doing so. As highlighted throughout Sections 3 and 4, a small proportion are utilising all forms of equity financing, from specialist growth-capital equity
Mid-market and scaling family businesses make use of a range of external finance, with 78% responding that they are using at least one form of external funding and many being more likely to be using debt than equity. However, four in ten say access to appropriate forms of capital remains a significant barrier as they seek to scale up further, rising to five in ten where turnover is around £25m or more. This mirrors the recent FBUK Policy Agenda 17 publication where six in ten are comfortable with their finance arrangements while among those in smaller family firms seven in ten report having concerns. The mid-market businesses are also more commonly looking for long-term patient capital. One in three are planning to self-fund operations, e.g. via retained profits. Among those seeking finance externally there is a strong perception that most funding is in London and the South East of England, with 57% reporting this. Despite this, though, 59% think that public-
17 https://familybusinessuk.org/family-first-approach-in-new-fbuk-policy-agenda/ At the end of January 2026, Family Business UK surveyed more than 550 family firms of which 323 were in the mid-market.
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