The British Business Bank responds to an updated mandate from the UK Government by releasing a 5-year strategic plan for delivering a “step change in how UK smaller businesses are financed.” The bank’s mission is to drive economic growth by helping smaller businesses get “the finance they need to start, scale and stay in the UK.”
Earlier, the bank was given an increased “permanent financial capacity of £25.6bn, and more flexibility to deliver.”
The five-year plan outlines how the Bank will act “through its Investment and Banking businesses, and its Business Development function,” in order to deliver the following commitments:
- Catalyse more capital: We will increase our annual deployment by two-thirds, unlocking around £26bn of private capital alongside £13bn of our funding, and enable up to £10bn in smaller business lending through guarantees.
- Take more risk: We will take on additional risk, including through providing the first capital in deals that support emerging technologies where the UK can lead globally. We will use our greater risk appetite at portfolio level to prioritise deployment to Industrial Strategy sectors.
- Focus on scale-Ups: We will target over 60% of venture and venture-growth investment towards scale-ups, with the ability to write larger cheques (£100m+) into the best growth-stage funds.
- Make more direct investments: We will increase the number and size of such investments so strategically important scale-ups can raise domestic capital and grow at home.
- Unlock potential across the country: We will deliver 85,000 new Start Up Loans and commit £150m to Community Development Finance Institutions to support underserved groups. We will increase regional investment and support the development of regional science and innovation clusters, new regional angel networks and establish two new regional investment funds in the East and South-East of England.
- Reform the Bank: We will reform our governance and operating model, giving us greater licence to operate flexibly, and streamline internal processes to make faster investment decisions.
Louis Taylor, CEO, British Business Bank, said that by 2030, our ambition is clear: a more dynamic and “inclusive finance ecosystem, where ,,, 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.”
Their 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.”
Peter Kyle, Secretary of State for Business and Trade, said that their small businesses have 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 5-year plan it will.”
The Bank is increasing its pace of investment “by two thirds, with a £4 billion boost for the promising businesses in their Industrial Strategy sectors, supporting businesses, creating jobs, driving growth.”
The commitments fall under the strategic objectives for the British Business Bank announced in October as part of its “strategic mandate” to drive UK growth:
- Support our most promising businesses in the modern Industrial Strategy priority sectors to scale and stay in the UK.
- Make finance more accessible for smaller businesses.
- Unlock the potential in people and places.
- Mobilise institutional capital at scale.
