Established small and medium-sized enterprises (SMEs) in Wales punch above their weight in terms of job creation, new research reveals. A report by Oxford Economics for Allica Bank shows that these businesses account for over two in five private sector jobs, despite representing just 22.8% of the nation's business population.
Key Findings
Established SMEs—firms with between five and 250 employees—number 23,965 in Wales. They contribute 44% of all private sector jobs, nine percentage points above the UK average of 35%. This is significantly higher than London, where established businesses account for 30% of private sector employment. Among UK nations and regions, only Northern Ireland has a higher rate at 46%.
Across the UK, established businesses are a critical driver of economic activity, accounting for more than a third of private sector employment and 37% of private sector turnover. They also support almost one in every two private sector jobs in rural areas.
Financing Challenges
Despite their importance, many established SMEs face challenges accessing finance for investment. The report highlights a £65 billion lending gap to UK SMEs accumulated over the past 25 years, restricting capital for expansion, productivity improvements, and job creation.
However, when finance is available, the impact is substantial. In 2025, Allica Bank's lending to established businesses enabled an estimated £520 million contribution to GDP in Wales and supported 8,700 local jobs. UK-wide, 78% of the GDP contribution and 80% of the employment impact from Allica Bank's lending occurred outside London and the South East, underscoring the role of productive finance in supporting local economies.
Expert Insight
Conrad Ford, chief product and strategy officer at Allica Bank, said: "I speak to established businesses all the time and you quickly see how important they are to their local areas. These are the manufacturers, logistics firms, hospitality operators and specialist businesses that employ local people, support supply chains and keep communities thriving.
"The report puts numbers behind that. Although established businesses make up a minority of the wider SME business population, they account for around 60% of private sector employment. In 2025, Allica Bank's lending to established businesses enabled an estimated £8.4 billion contribution to GDP in the UK and supported 118,000 jobs across the country. That shows what can happen when established businesses get the finance they need to invest and grow."
