Market Update: UK economy missing out on £5Bn by not helping refugee businesses grow – Full Analysis

Entrepreneurship can be a catalyst for solving the UK’s economic growth problem, if these entrepreneurs are supported in the right way. New businesses create jobs, revive high streets, and strengthen local economies. But, while there’s a lot of focus on helping people start businesses, there’s far less support to help them survive and grow. Getting started is only the first step – staying in business is often much harder.

This gap in support is especially clear for refugee entrepreneurs. In fact, research commissioned by Square and The Entrepreneurial Refugee Network (TERN) estimates there are around 26,500 self-employed refugees in the UK. Our Unlocking the Refugee Entrepreneur Opportunity report highlights how these businesses create employment and add value to communities and the economy, so supporting them to grow remains pivotal.

At its core – this is about economic empowerment – ensuring people have access to the tools, financial systems, and support they need to build and sustain a business, regardless of their starting point.

However, refugee founders often face bigger challenges than other small business owners. They may struggle to access funding, lack established professional networks in the UK, and start from a less stable position. Without ongoing support after launch, many of these businesses can’t reach their full potential, which research found could be adding up to £5.1 billion to the UK economy.

Starting a business vs keeping it going

Entrepreneurs start businesses for a number of reasons, many of which are personal – tied to family, culture, or past experiences. But growing a business once it’s created brings new pressures. Costs like rent and staff wages increase as businesses scale, and tax rules once business size thresholds are surpassed may become more complicated.

For entrepreneurs who are also refugees, doing this without the support or local knowledge presents even more real challenges – that are practical, emotional, and systemic. These founders may not have the immediate support network or the local knowledge to navigate bureaucracy without guidance.

Support then, should not just be available at the startup phase, but should expand to ensure entrepreneurs are supported to stay operational. This means extending entrepreneur support programmes beyond launch, into one or two year-long sustainment phases. Operational support, not just business development, is crucial. This includes practical support like help from banks and NGOs for costs such as insurance, equipment and certifications, as well as advice on growing the business.

Understanding the system isn’t easy

Government guidance for navigating regulation and policy changes exists, but it can be fragmented, unclear, and difficult to understand. Many refugee entrepreneurs told Square that they relied on YouTube videos, or their peers, to fill in the gaps in understanding. And when it comes to starting up a business, confidence is just as essential as capital.

The impact of mentors, peer groups and strong communities cannot be understated. Aspiring entrepreneurs and refugees with their own businesses need long-term mentor relationships, caseworkers, or individual business ‘navigators’ to help them understand the system better. Building trust and real human connections makes a big difference. It helps people feel less alone and more comfortable with the ups and downs of learning and trying to succeed, while also making it easier to understand the system.

The economic cost of half-measures

Hardship for refugee entrepreneurs was also recognised by the wider UK public, with our research finding that more than half (56%) of the UK public population agree that refugee entrepreneurs face tougher access and rules to funding to start a business than the rest of the UK population.

Support needs to reflect this reality. In practice, this could mean more access to micro-grants, as well as easy access to funding linked to future sales. It could also mean embedding mental health and well-being support directly into entrepreneurship programmes.

When refugee businesses fail, it affects more than just the founders. Jobs are lost and local economies miss out on growth.

Refugee entrepreneurship is not a niche issue – it’s an important part of the UK’s small business economy. The £5.1 billion economic potential is real, but it won’t be achieved without better, long-term support for businesses not only as they’re starting up, but also as they’re growing.