Tech startups have significantly changed the shape of traditional business sectors such as financial services and the UK economy, according to new Experian research. But banks are failing to serve these ventures which don’t fit the traditional lending requirements.

Max Firth, managing director at Experian Business Information Services, UK&I, says: “The UK’s business landscape has changed dramatically in the 21st century. Startups are created using knowledge, skills and the internet, often with just a laptop, mobile phone and a small or home office. Fewer companies are being created in asset-intensive sectors where there is a need for expensive machinery, so the requirement for bank loans and an overdraft has shifted as a result. Businesses which understand the nature of the ‘Generation Z’ startups and how they operate will be in the best position to serve them as they grow.”

East London was the home of 3.4 per cent of UK startups created in 2013, the most in the UK, while London as a whole accounts for six of the top eight postcodes for business incorporations. Birmingham, Manchester, Reading and Leicester also appear in the top 10. The vast majority of businesses started in the 21st century reported minimal share capital and no long-term liabilities on their first annual accounts – 78 per cent have no long term liabilities, and 79 per cent have issued capital valued only from £1 to £100.

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