The British Business Bank has strengthened its partnership with Allica Bank by providing an additional £15 million in Tier 2 capital. This move increases the total funding support to £45 million and is expected to unlock up to £150 million in new lending capacity for established small and medium-sized enterprises (SMEs) across the UK.
Announced recently this month, the latest lending / credit facility builds directly on an initial £30 million Tier 2 arrangement established in 2022.
The expanded capital will enable Allica Bank to extend more financing options to businesses that often struggle to access traditional banking services, particularly those with between five and 250 employees.
Allica Bank, which secured its full banking licence in 2019, operates as a specialist digital institution dedicated exclusively to serving established SMEs.
These companies form a critical part of the British economy, contributing significantly to GDP and employment.
Since its launch, the bank has delivered more than £4 billion in loans to over 25,000 businesses and attracted over £5 billion in deposits.
Its approach combines personalised relationship banking with advanced AI tools to deliver tailored financial solutions.
The additional capital comes at a pivotal time for Allica, which recently achieved a valuation close to $1.2 billion during its Series D funding round.
Industry professionals now generally credit the British Business Bank’s ongoing involvement with playing a meaningful role in this growth trajectory, helping the lender scale its operations and solidify its position in the market.
Tier 2 capital facilities of this kind serve as strategic tools for the British Business Bank to stimulate lending activity among partner institutions.
By enhancing banks’ capital bases, these investments aim to expand the overall availability of finance for smaller businesses nationwide.
Independent analysis by Oxford Economics underscores the broader impact: for every £1 million lent by Allica to established firms, the economy benefits from an additional £2.4 million in GDP, the creation of 35 jobs, and approximately £600,000 in tax revenue.
Richard Bowen, Managing Director of Direct Financial Institution Solutions at the British Business Bank, highlighted the evolution of the partnership.
He noted that Allica Bank has now expanded considerably since the 2022 transaction and emphasized how such collaborations advance the shared goal of fostering UK economic growth.
Bowen expressed enthusiasm about the bank’s continued support for business expansion and praised Allica’s efforts in championing smaller enterprises while building a distinctive brand.
Richard Davies, CEO of Allica Bank, described the funding increase as a vital advancement in serving overlooked segments of the SME sector.
“Established businesses power much of the real economy yet frequently receive insufficient attention from conventional lenders,” he stated.
The fresh capital will accelerate Allica’s ability to provide funding, enabling companies to invest, expand, and generate employment opportunities.
Davies viewed the strengthened alliance as a model for how targeted partnerships can mobilise greater resources for SMEs and contribute to nationwide prosperity.
The British Business Bank, established in 2014 as the UK government’s dedicated economic development bank, focuses on improving access to finance for smaller firms to help them launch, grow, and remain competitive.
Its programs have facilitated considerable financial resources in support across thousands of businesses. Allica, meanwhile, continues to pursue key business targets, including a 10 percent market share in its segment by 2028.
