One of the largest SME lenders, iwoca has analysed data from the ONS and found that medium-sized firms have grown fastest over the last decade, compared to small and large firms. iwoca defined a medium sized firm as between 50 and 249 employees. Overall, medium-sized businesses increased in size by 20% over the decade and now employ 3.7 million people. In comparison, large and small businesses have increased employee numbers by only 10%.
What isn’t clear, as iwoca did not reveal its analysis, is the impact of small businesses becoming medium-sized businesses during that period or medium-sized sized becoming large businesses. iwoca found that the number of businesses rose by 20%, 18% and 19%, respectively, across small, medium and large businesses. There are now 41,540 medium-sized companies—up from 34,985 in 2014.
It also revealed that the number of firms has grown evenly across the size of firms, with a million additional firms in 2024 compared to 2014. The research comes at a time when many are predicting employee counts to fall, with as many as 300,000 jobs at risk come April when the increase in National Insurance kicks in.
Notably, over the same decade, the population is estimated to have grown by 4.4 million, from 64.6 million to 69.0 million, with an annual growth rate of 0.7%.
Where is the growth?
The most successful firms in the medium-sized sector over the last ten years appear to be IT and Healthcare. The number of IT firms grew by 62% to over 2,500, while the number of professional, scientific, or technical companies grew 35% to 4,285. The professional, scientific, and technical industries now make up 15.3% of all businesses, and IT firms make up 6.9%.
Other sectors have fluctuated; especially notable during COVID was the variation in transport and storage firms. In 2020 and 2021, they grew strongly but have decreased since. Falling by 9.1% in 2024 and making up only 4.3% of all businesses.
Regionally, London and The South West saw the biggest increase in medium-sized firms, with London saw growth by more than a third over the decade to 8,000 in 2024. The South West saw a rise of 22% since 2014.
Colin Goldstein, Chief Commercial Officer, UK at iwoca, said, “Medium-sized businesses are driving job growth in the UK and creating jobs at a faster rate than both small and large firms.
“They are responsible for 3.7m jobs and need access to finance to continue making significant contributions to the UK economy and increase their productivity.”
Enterprise Times: What does this mean?
For iwoca, the growth of medium-sized businesses prompted it to increase the loan ceiling of its Flexi-Loan product to £1 million. Boosted by $200 million in new funding, the Flexi-loan now offers between £1,000 and £1,000,000 for a term of between 1 day and 2 years.
Nearly six months later is iwoca seeing an increase in loans by businesses? Also, will the increase in National Insurance mean that some firms will want to take out a loan in order to ride out the increase in time for revenues to increase in line?
This research shows that the number of medium-sized businesses has increased; about the rate of population increase, the question is whether that increase will continue during 2025, with so many issues around.
