How Private Equity and Borrowing Together Supercharges Business Growth
We recently launched ThinCats Growth Lens, a new analysis of long-term revenue trends across nearly 200,000 mid-sized UK businesses. The aim is to better understand how firms achieve meaningful, above-inflation growth — and what differentiates those that grow steadily from those that grow significantly.
One of the most consistent findings from the data is the role that funding plays in driving growth — particularly when private equity investment is combined with borrowing.
Defining Growth:
To assess growth in a meaningful way, we focused on annual revenue increases above inflation, grouping firms into four growth categories:
- Growth: 5%+ above inflation
- Solid Growth: 10%+
- Strong Growth: 25%+
- Super Growth: 50%+
Combining Borrowing with Private Equity
Looking at businesses that borrowed £5 million or more, we found that:
- Those without private equity backing were 50% more likely than average to reach Solid Growth, and 2.5 times more likely to achieve Super Growth.
- When these borrowers also had private equity investment, their likelihood of achieving Strong Growth doubled, and the chance of reaching Super Growth rose to four times the average.
This suggests that access to significant funding is important, but the combination of capital and strategic backing through equity investment creates a more sustained and effective growth trajectory.
Private equity firms often bring more than capital — offering governance, strategic input, and operational expertise. When combined with borrowing, this can enable firms to pursue growth strategies such as buy and build, or investment in new capabilities, without immediate pressure to dilute ownership or rely solely on internal resources.
The data highlights that the alignment of long-term investment with flexible funding can be a key differentiator for mid-sized firms seeking to grow at pace.
ThinCats Growth Lens, powered by our PRISM data platform, also explores growth patterns across sectors, regions, and economic cycles between 2007 and 2023. The full analysis offers further insight into the funding characteristics of consistently growing businesses.