Manufacturing and engineering are the backbone of the North’s economy, but are businesses getting the financial support they need to grow? KATIE ROBERTS explores how access to banking is holding back smaller firms and what can be done to change it.

As the UK pushes for decarbonisation and stronger industrial resilience, northern manufacturers have a unique opportunity to lead. But while big corporations get banking priority, thousands of established SMEs are left struggling to access fair finance. ROBERTS of Allica Bank argues that with alternative banking options on the rise, now is the time for businesses to rethink their financial strategies.

Banking on the North

As somebody who works with manufacturing and engineering businesses across the north every day, I see firsthand the role these industries play in our communities and regional economy. These businesses help drive innovation while supporting skilled careers that last a lifetime.

Recent events have only served to highlight the importance of these businesses to the north, the UK and beyond. Firstly, the UK faces an urgent need to decarbonise and build the industries of tomorrow, and engineering excellence is central to this.

Similarly, with recent events on the world stage having exposed the UK’s vulnerability to outsourced manufacturing, the case for rebuilding industrial capacity has never been greater.

So, there’s a huge opportunity for manufacturing and engineering businesses across the north. The question is, can we capitalise on it?

Opportunity Knocks?

The many business leaders I speak to are up for the challenge and ready to invest, innovate and grow.

My colleagues at Allica Bank recently surveyed established businesses across the country, and the results speak for themselves:

• 40% of business leaders want to raise investment finance over 2025.
• 48% want to leverage emerging technologies to drive efficiency gains.

With the green industrial revolution gathering pace, businesses are eager to embrace new technologies and put the north at the heart of the sustainable economy. All too often, however, this ambition isn’t being matched by an over-cautious banking sector.

Not on the High Street

While good business banking was once widely available to businesses of all shapes and sizes, today high-street banks are overly focused on big, corporate businesses. This is often at the expense of established but smaller firms, with between 5 and 250 employees.

Our big manufacturing and engineering businesses do incredible things and deserve our support. The fact is, however, they account for a minority of businesses in the manufacturing and engineering sector.

There are 395 big, corporate manufacturing businesses across the North East, North West, and Yorkshire and the Humber, according to the ONS. Impressive, but this compares to nearly 13,000 equivalent businesses with between 5 and 250 employees.

These businesses are the backbone of industry in the north. Yet, all too often, the banking sector leaves them struggling to access the finance and support they need to grow.

An example of this is the way high-street banks routinely offer big businesses generous returns on their savings while offering thousands of established businesses low or no interest on theirs.

This lost interest – the gap between what’s offered to corporate firms and established businesses – can quickly add up.

For a business with £500,000 in savings, it equates to a loss of around £14,000 per annum.

For the 13,000 established manufacturing businesses across the north combined, this would be a staggering £180 million. This is vital cash that could otherwise be used to invest in emerging technologies, upskilling workforces, new plants, and expansion.

With the cost of employing and doing business going up, this is a loss many businesses can scarcely afford.

A Better Banking Future

Thankfully, however, the days when the big-six banks dominated financial services are long gone.

That’s why one simple piece of advice I give to the businesses I speak to is to spend some time shopping around. If your bank isn’t putting your money to work or failing to give growth and investment plans the consideration they deserve, the chances are a better deal is available elsewhere.

Manufacturers across the north are hungry to grow and innovate – they deserve banking partners who share this hunger.