The path to a stronger economy through financial inclusion

The UK economy is at a critical juncture. And with senior Labour backbenchers now calling for legislation that would compel banks to widen access to affordable lending for small businesses and underserved communities, momentum for change is building. Growth may be the priority across every sector, but one of the most powerful levers for unlocking it is financial inclusion. Too many talented entrepreneurs are still held back by a system that doesn’t serve them equally.

The Entrepreneurship Revolution report, commissioned by Block and undertaken by Public First, shows that Britain is poised for a surge in entrepreneurship. One in 10 people in Britain want to start a business in the next year, equivalent to more than five million potential founders. More than two-thirds (67%) of 18–34-year-olds are considering entrepreneurship, and 15% of the population already runs a side-hustle. This surge signals a fundamental shift in how people want to work and earn.

The consequences of unequal access to finance are clear. Every year, more than 50,000 viable SMEs are rejected for loans. Addressing this unmet demand could unlock £7.4 billion, and even a modest 1% productivity lift across SMEs – where revenue grows faster than headcount – could add £24.6 billion to the economy annually.

Adapt, pivot, reinvent – with the right support

Entrepreneurs need fast, equitable access to funding that reflects the realities of running a small business. Traditional finance often favours larger companies, leaving many SMEs without the tools they need to manage cash flow and invest in growth.

Data from our Entrepreneurship Revolution report underscores this gap. Access to finance is the single biggest barrier preventing side-hustlers from turning part-time ventures into full-time businesses. Structural inequities can make the problem worse for those from underprivileged backgrounds, who often face reduced access to networks, mentorship, and funding guidance. For example, ethnic minority entrepreneurs may have fewer opportunities to develop the business networks and skills needed to navigate financing successfully.

Addressing these systemic barriers is essential not only because it’s the right thing to do, it also benefits the economy at large. Our report shows a quarter of ethnic minority entrepreneurs already run side-hustles, and nearly as many plan to start a business in the next year, a clear sign of untapped potential.

But capital alone isn’t enough. Resilience and technology adoption are increasingly essential to business growth. Digital tools, from e-commerce platforms to payment systems and marketing software, are critical for scaling operations, reaching customers, and responding to economic shocks.

Younger entrepreneurs consistently identify improved digital tools as essential to scaling their ventures, particularly technologies that help them reach customers and manage payments more effectively. At Square, we see how combining accessible technology with flexible, sales-linked finance can support growth where traditional lenders fall short.

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Economic empowerment for all

There is an urgent need to give all small businesses fair access to capital and the tools they need to invest and grow. While women and ethnic minorities face the clearest systemic gaps, other groups – including entrepreneurs based in rural areas and younger founders – are also affected. Closing these gaps strengthens the wider economy, not just individual businesses.

The real prize lies in turning entrepreneurial ambition into sustainable growth. When founders can access finance and technology that reflects how modern businesses operate, they are better able to scale, create jobs, and contribute consistently to local economies across the UK.

By addressing structural barriers to finance, accelerating the adoption of  digital tools, and supporting resilient growth, the UK can harness the entrepreneurial energy already present across the country. This isn’t just a question of fairness; it’s about creating a stronger, more dynamic economy that works for everyone.