Hackney’s start-up scene is thriving, according to new lending data from the Start Up Loans Company. The borough topped a list of London areas that received funding from the government-backed company in the last four years.
Entrepreneurs in Hackney received £4.9 million in funding – or one loan for every 343 residents.
Overall, East London fared particularly well, receiving over £23.2 million. This accounts for over a third (35 per cent) of all lending to the capital from the company since it was set up in 2012. Local London lending data is calculated based on where funding applicants reside.
Tim Sawyer CBE, CEO at the Start Up Loans Company said: “The East End’s famous entrepreneurial spirit is alive and well and it’s great to see Hackney leading the way in the capital’s start-up stakes. We’re proud to support companies across London, giving them the opportunity to grow and thrive in the capital. We’ve seen some great successes already and we look forward to helping even more start-ups.”
Entrepreneurs based in other ELL boroughs also attracted considerable funding with Lewisham, Croydon and Tower Hamlets also making the Start Up Loans Company top ten. The three boroughs combined have received £9.5 million in the last four years.
Source: Companies House
Figures from Companies House show that of over 600,000 new companies were started in the UK last year, 18,390 of which were in Hackney – second only to Westminster nationally.
London’s Mayor, Sadiq Khan has been eager to be seen as a champion of business. Following the vote for Brexit earlier this year, Khan pledged to be the “most pro-business Mayor that London has ever had.” Twenty start-ups have benefitted from £2.5 million in funding from the Mayor’s London Co-investment fund since the EU referendum –a quarter of which are in the ELL areas.
Many tech-based companies and food and drink businesses are based in Hackney, which is home to London’s ‘silicon roundabout’. Shoreditch in particular is a hub for many thriving industries.
Entrepreneur, Duncan O’Brien founded Dalston’s, a soft drink company, with support from the Start Up Loans Company. “The inspiration for our products came from Dalston’s street market – it’s full of bold ingredients and is where the lightbulb moment for Dalston’s happened. We wanted to stay true to our roots, so we developed our brand based on this.
“There’s a real entrepreneurial flare here in the East End, and we’re extremely proud to call it home. It also has a tight-knit start-up community and we all help each other out as we face the highs and lows of growing a business from scratch.”
Hackney’s council is however, aware that fledging businesses often need a supportive environment to flourish and the council has made efforts to encourage business in the borough. Councillor, Guy Nicholson, Hackney’s Cabinet Member for Planning, Business and Investment said: “Hackney’s creative economy is one of the fastest growing in the UK generating many opportunities, but it will only remain competitive if new ideas can find a way into the market place.”
There are also concerns that the government’s recent increase in business rates, which affects retailers, as well as high and rising rents could serve to discourage London’s entrepreneurs, including in Hackney.
“Figures of up to £70 per sq foot are now being charged in Shoreditch for commercial space,” said Nicholson in a letter to Chancellor, Philip Hammond. “This rapid increase has distorted the borough’s revaluation and ignores the reality that many of its established businesses, in Shoreditch and elsewhere in the borough, have not seen an equivalent rise in profits that could accommodate such a massive hike in business rates alongside rising commercial rents.”
The Bootstrap Company in Hackney provides workspace for start-up businesses, creatives and charities. CEO Sara Turnbull is concerned that high costs of workspace and rent is impacting the vibrancy and diversity of the borough’s start-up scene. “Market rents for places to live and work are increasing and in particular creatives and entrepreneurs from low income backgrounds are struggling to survive,” said Turnbull.
In light of these mounting pressures, the organisation has set up its own fund, the Bootstrap Fund, a subsidy pot that supports tenants to reduce their rent based on their social impact.
Turnbull believes public sector authorities can play a greater role in supporting organisations such as Bootstrap: “There is real scope for the public sector to offer rent subsidies and rates discounts to social purpose managed workspace providers – we can then pass these savings on by extending our services and funding support to our tenants who can then get on creating jobs and bringing the community together.”
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