ECONOMISTS in Manchester have challenged a major Government report which asserts there is an equity gap for firms who need between £2m and £10m of funding.

New research undertaken by pro•manchester disputes key data used in the influential Rowlands Report, a review conducted by the Government which analysed funding issues faced by small and medium sized businesses.

The “Review of Rowlands” is part of a three month research project undertaken by pro•manchester on behalf of AGMA and the Commission for the New Economy into support for Innovation and Enterprise in Greater Manchester. The review found that, far from being an equity gap, 46% of all recorded deals nationally were for between £2m and £10m. In fact, deals of between £2m and £10m made up nearly half of all deals in nearly every sector. 

More than half of all deals categorised as ‘development growth capital’ took place within the £2m to £10m range.

John Ashcroft, CEO of pro•manchester, said the pro.manchester research is extensive and robust. “We challenge whether sufficient evidence is contained within the Rowlands Report to support the assertion that an equity gap exists between £2m and £10m. The data used in the Rowlands Report and much cited by policymakers is not consistent with the wider conclusion.

“Businesses and the SME sector specifically face important challenges but it’s essential that research is accurate, consistent and credible. Manchester has a vibrant Corporate Finance Community and Manchester is probably the centre for mid tier private equity finance in Europe. Our members do not identify with the concept of a funding gap.“

The review by pro Manchester assessed one of the key conclusions made in the Department for Business, Innovation and Skills report entitled "The Provision of Growth Capital to UK Small and Medium Sized Enterprises", also known as the Rowlands Report. 

The final report into innovation and enterprise in Greater Manchester is due to be completed by mid November. The interim report can be seen here www.pro-manchester.co.uk/innovationandenterprise.

You can view the Rowlands report here