Investment in UK small businesses hit a record high last year despite a freeze during the early parts of the pandemic.

New data from the British Business Bank and Beauhurst showed a 9% jump in equity investment in small business last year, to £8.8 billion, the highest since the data started being gathered a decade ago.

The initial freeze on investment at the beginning of the year thawed later in 2020.

“I think there absolutely was a dislocation in the markets which we were observing in real time in April, May and June last year,” said British Business Bank chief executive Catherine Lewis La Torre.

“There was this big boost in the latter half of the year as confidence started to return.”

The annual study – which does not capture all the deals – showed that the strong performance in the latter stage of 2020 has continued into this year.

The first quarter of the 2021 has proven the best since the annual report started being produced in 2011. Investment reached £4.5 billion in the quarter.

The British Business Bank said that it had supported around 21% of all equity deals which were announced last year, compared to 10% in 2019.

It was a transformative year for the bank which administered several Covid-19 loan schemes for the Government.

More than £75 billion has been lent through the three schemes run by the British Business Bank, according to data from March.

In response to a Freedom of Information request the Government refused to release the final figures for the loan programmes, saying they will be published later in the year.

The bank’s figures show that the so-called “deep technology” sector – which solves substantial technological or scientific problems – has grown its equity investment by 291% to £2.3 billion in the last five years.

Yet the sector is still lagging behind its counterparts in the US, which get much more funding.