Millennials more likely to invest in SMEs

YOUNGER investors are more likely to back small- and medium-sized enterprises (SMEs), according to new research from the UK Business Angels Association.

A survey of 1,000 UK investors found that 70 per cent of respondents aged 18-34 said they would invest in SMEs, compared to 52 per cent of investors of all ages.

£120bn has been invested into small businesses since 2008, with a 49 per cent increase in the annual amount invested since then.

Read more: Funding Circle report finds banks are still snubbing SMEs

This ties into a rise in ethical investing, as people are taking an active interest in where their capital is being used, according to the UK Business Angels Association.

“We have seen a clear movement from investors to support smaller growing businesses, especially from seasoned, experienced investors who are looking to take a slightly more active role in the businesses they support,” said Jenny Tooth, chief executive of the trade association for angel and early-stage investment.

Read more: SME alternative finance knowledge on the rise

“This is one of the key pillars of angel investing, providing not only funds but also guidance and help to entrepreneurs. There is far more of a moral choice involved with supporting UK small businesses over the established companies that exist in the FTSE 100 and 250.

“Support for small businesses also extends to those businesses that are local to individual investors, giving further options to experienced investors. This has been widely discussed for ethical investing but it is great to see that it is also starting to apply to the high growth small businesses that are so vital to the UK economy.”

Read more: SME finance demand down on Brexit uncertainty