UK Family Businesses will contribute 218 billion by 2018

First generation family-owned SMEs are set to see revenues rise 21% from £540 billion a year to £661 billion by 2018, according to a new report by Barclays Business.

The report found that first-generation family SMEs currently contribute £180 billion in gross value added (GVA) to the UK economy, an annual contribution that is set to rise by 21% in nominal terms, reaching £218 billion in 2018.

The value of family SMEs, taken as a group, to the British economy (£180 billion) 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.

Barclays Business saw an 8% increase in term lending to family firms in 2013. During the last year these businesses drew down nearly £900 million 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 £3 billion over the next three years.

Rebecca McNeil, Director of Business Lending and Enterprise at Barclays Business commented: “Family SMEs play a powerful role in the UK economy and one that is set to increase if they have the right access to support and funding.”

“We currently work with over 130,000 family run businesses and have built up a great deal of expertise in guiding them through their growth phases. Whether they aspire to become a household name like J Sainsbury or Arcadia or simply to provide a strong income for their own family, they offer the country value through both their economic contribution as well as their employment opportunities.”