Since announcing his intention to create The British Business Bank in September 2012 with £1bn of Government funding, Business Secretary Vince Cable has said that the scheme is already achieving significant results as over 30,000 businesses are benefitting from its programmes.
Last year, £782m of new lending and investment in UK small firms was generated by Business Bank programmes – double the level of activity generated by Government finance programmes to small business in 2012/13.
In addition, the British Business Bank also funds the Start-Up Loans programme, which has lent £70 million to new entrepreneurs in the UK. The Bank has increased utilisation of the Enterprise Finance Guarantee to £348m (up by 21% year on year). This programme helps firms with good cashflow but low levels of collateral to obtain bank finance.
The British Business Bank has also played an important role in promoting a wider range of finance options. 61% of its activity is channelled through smaller investors and lenders, with only 39% of support going through the big four banks.
Last week Business Secretary Vince Cable published the new Strategic Plan for the British Business Bank which sets out the Governments ambitious plans for further increasing the impact of the institution. The full board of the British Business Bank is now in place, as are the majority of the staff and senior management team, operating out of the headquarters in Sheffield as well as, temporarily, the BIS office in London. The next stage will be to complete state aid negotiations with the European Commission later this year. At this point, responsibility for the assets and staff currently of the Bank will transfer fully to the new corporate structures we have put in place.
The British Business Bank programme is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. Once HM Government has received European Commission State aid clearance, which is expected in 2014, this programme will be transferred in its entirety to the British Business Bank plc, which will operate as a Government-owned financial institution.
The publication of a new Business Finance Guide aimed at making smaller businesses aware of the options for finance available across the market has also been produced by the British Business Bank and the ICAEW in association with trade bodies representing all the major sources of funding – as well as the main business representative bodies.
Download the copies of the Strategic Plan and the new Business Finance Guide.