The British Business Bank has published a five-year strategic plan outlining how it will deliver a “step change” in the way smaller businesses across the UK access finance, following an updated Government mandate and a significant increase in investment capacity.
The Bank, which aims to drive economic growth by helping smaller firms start, scale and stay in the UK, was granted an enhanced permanent financial capacity of £25.6bn earlier this year.
Its new plan details how it will use this firepower across its Investment and Banking divisions, alongside its Business Development function.
Under the strategy, the Bank intends to:
Catalyse more capital: Increase annual deployment by two-thirds, unlocking around £26bn of private capital alongside £13bn of its own commitments, and enable up to £10bn in small business lending through guarantees.
Take more risk: Provide first-loss capital in deals supporting emerging technologies where the UK has global leadership potential. Its increased risk appetite will be used to prioritise investment in Industrial Strategy sectors.
Focus on scale-ups: Direct more than 60% of venture and venture-growth investment towards scale-ups, with the capability to write cheques of £100m or more into high-growth funds.
Increase direct investments: Deploy more direct capital to ensure strategically important scale-ups can raise domestic investment and expand in the UK.
Unlock regional potential: Deliver 85,000 new Start Up Loans and commit £150m to Community Development Finance Institutions to support underserved groups. The Bank will also boost regional investment, support emerging science and innovation clusters, develop new angel networks and create new investment funds for the East and South East of England.
Reform its operating model: Streamline governance and internal processes to improve agility and accelerate investment decisions.
Louis Taylor, CEO of the British Business Bank, said: “By 2030, our ambition is clear: a more dynamic and inclusive finance ecosystem, where innovative and ambitious companies – wherever they are based and whoever leads them – can access the capital they need not only to get started, but to scale, stay, and succeed here in the UK.
“Our planned activity over the next five years is expected to fund around 180,000 businesses, support the creation of around 370,000 new jobs, crowd in £26bn of additional private capital and help deliver £68bn of benefit to the economy.”
Business Secretary Peter Kyle said: “Our small businesses have ambition and bright ideas in abundance, but too often they lack the finance they need to reach their full potential here in the UK, and as a result, our economy suffers.
“This has to change and with this new 5-year plan it will. The Bank is increasing its pace of investment by two thirds, with a whopping £4 billion boost for the most promising businesses in our Industrial Strategy sectors, supporting tens of thousands of businesses, creating jobs, and driving growth.”
The strategy aligns with the Bank’s four new objectives set out in its refreshed mandate: supporting high-potential firms in priority sectors, making finance more accessible, unlocking potential in regions and communities, and mobilising institutional capital at scale.
