New data from Albion Ventures and ThinCats explores generational gaps relating to business ambition, Brexit, and peer-to-peer lending.

Young entrepreneurs are more than twice as ambitious about their company's growth prospects than their elder counterparts, but have a “far more negative” outlook on Brexit, according to a new report by Albion Ventures.

For its fourth annual Growth Report, designed to shed light on the factors that both create and impede growth among more than 1,000 small- and medium-sized enterprises, Albion commissioned market researcher YouGov to interview a representative sample of 1,014 UK SMEs.

Results revealed that two-thirds, or 66 per cent, of business owners under the age of 35 predicted their business will grow over the year ahead, with 18 per cent projecting “dramatic growth” compared with just 7 per cent among older generations. As a result of these expectations, more than half, or 52 per cent, of younger chief executives said they are planning to hire more staff while the average across ages was 35 per cent. 

Despite their bullishness on business performance, Britain's divorce from the European Union appears to have left young entrepreneurs with cold feet; more than half, or 54 per cent, said they think it will hinder their ability to access new markets while older business owners were not as concerned, with only 41 per cent citing worries. With this being said, millennials – those aged between 18 and 35 – still seem to have an enthusiasm for exploring new markets, as six in 10 said they plan to expand into new markets in 2017, compared with 37 per cent of their older peers.

The largest generational gap highlighted by the report's findings related to equity finance; nearly three-quarters, or 71 per cent, of under-35s said they would consider equity finance compared with 44 per cent of “other age groups”, underlining a cultural shift among young business owners towards what Albion dubbed a “Dragon's Den-style approach” away from traditional bank debt. 

Meanwhile, research from UK-based peer-to-peer platform ThinCats appears to strengthen this notion that millennials are moving away from traditional forms of loans. A survey conducted by Opinium involving 2,000 individuals, including 574 active investors, found that millennials are four times more likely to have money invested through P2P platforms than those aged 55 and over. 

Hamstrung by rock-bottom interest rates, 4 per cent of millennials currently have money invested in the emerging P2P sector, compared with just 1 per cent of over-55s, according to ThinCats' statistics. Some 29 per cent of millennials cited the ability to cut out banks as the sector's biggest advantage while 28 per cent were attracted to the idea of being able to lend directly to businesses. Almost a quarter (23 per cent) said they have had P2P recommended to them by a friend. 

“The P2P sector has been growing in popularity since it first arrived in the UK a decade ago, but many people still consider it to be something of a novel investment. That perceived novelty is perhaps why it has proved so popular with younger investors, but that could soon be about to change,” said Kevin Caley, founder and chairman of ThinCats. 

The younger generation is also “far more open” to innovative new investments than their older counterparts, according to ThinCats. Some 51 per cent of millennials said they are willing to try new asset classes, more than twice as many as the 24 per cent of the over-55 cohort.