Published in July 2019, the Department for Business, Energy and Industrial Strategy’s Business Equity Finance and the UK Regions explores the differences in overall levels of equity finance between UK regions and the causes of these differences. The research uses business datasets, data matching and econometric analysis to determine the size of the finance gap by region and regional demand and supply factors contributing to the gap. Equity financing is the process of raising capital through the sale of shares. Companies raise money through equity financing because they may have a short-term need to pay bills or they may have a long-term goal and require funds to invest in their growth. By selling shares, they sell ownership in their company in return for cash, like stock financing.

The Report aims to improve the understanding of the regional distribution of equity finance or equity investments in small and medium-sized enterprises in the UK. This could impact policy making for how the North receives future funding to grow the economy.