The Family Affair: Spotlight on UK Family SMEs” report, conducted by Barclays Business and CEBR, found that there are currently 2.42m first generation family SMEs in the UK the highest number since the recession.
The number of family SMEs has increased over the past three years, up from 2.32m in 2011. That number is set to rise to 2.65m by 2018.
The value of family SMEs to the British economy ( £180bn) is currently greater than that of the overall manufacturing and wholesale or retail sectors demonstrating how vital these businesses are to the country as a whole.
In fact, first-generation family SMEs make a sizeable contribution to UK employment and this contribution is also set to rise in the coming years. There are currently 5.5m jobs provided by these family SMEs in the UK – equivalent to the number of jobs in the public sector. By 2018 this will increase by nine per cent to 6m.
Barclays Business saw an eight per cent increase in term lending to family firms in 2013. During the last year these businesses drew down nearly 900m of new or increased funding.
The rise in the number of family firms and increased investment from existing family owned businesses will see greater investment in the future growth of the family business sector. Barclays Business Banking expects family SMEs to draw down up to 3bn over the next three years.