Research by the British Business Bank and the UK Business Angels Association (UKBAA) has found that angel investment in the UK is on the rise.

On average, angels reported that 75% of their current portfolio has experienced turnover growth, while 80% have undergone employment growth.

Some 87% of angel investors said they used EIS or SEIS tax schemes for at least one investment in 2016.

It was also found that there were high concentrations of angel investors in London and the South East with the capital accounting for 47% of deals in 2016.

Keith Morgan, chief executive of British Business Bank, said: “British Business Bank research shows that angel investment is up, but the UK’s small businesses still suffer from an equity gap outside of the capital.

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“We are working on plans to support business angels across the UK and ensure smaller businesses can access the finance they need to grow and succeed, wherever they are in the country.”

Last month’s Autumn Budget announced that the British Business Bank would be given £2.5bn of extra resources to help support £13bn of long term patient capital for smaller businesses.

The Autumn Budget also called on the bank to support developing clusters of business angels outside London.

Jenny Tooth, CEO of UK Business Angels Association, added: “Angel investment is a vital source of finance for early-stage businesses and it is very encouraging that this latest research shows that angels have invested even more in small businesses in 2016 than the previous year.

“Yet the research shows that there remains a considerable challenge for entrepreneurs to access this source of investment outside the golden triangle – and so we are pleased that the British Business Bank has been given this new mandate to leverage further angel investment in the regions.”