British Business Bank supports £12.4bn of finance for SMEs

In some welcome news for UK businesses seeking sources of finance, the British Business Bank has exceeded its target for the amount of financing it has used to support SMEs.

The stock of finance supported through the British Business Bank’s core programmes totalled £12.4bn at the end of March 2023, according to the Bank’s annual report released today.

The sum exceeded the Bank’s £10.7bn target, supporting more than 90,000 businesses and helping to create a more diverse finance market for smaller businesses. Of the total financing, 99% was provided outside the ‘Big Five’ banks.

Regional support

Identifying the regional imbalances in access to finance for SMEs, the Bank met its target for deployment of finance across the UK’s nations and regions, deploying £1.27bn of finance outside of London.

Its regional funds – the Northern Powerhouse, Midlands Engine and Cornwall & Isles of Scilly Investment Funds – invested an additional £152m. This comes ahead of the launch of its new Nations and Regions Investment Funds, which will deliver a £1.6bn commitment of new funding across Scotland, Wales, Northern Ireland, the South West, North of England and Midlands.

Of a similar vein, the Bank’s Regional Angels programme made £55m of new commitments, helping to reduce regional imbalances in access to seed and early-stage equity finance for small businesses across the UK.

Other highlights from the report include its Start Up Loans programme passing the 100,000 loans milestone, meeting key targets for supporting the UK’s transition to a net zero economy, and meeting its objective in sharing expertise to the government effectively.

“The British Business Bank has continued to build momentum in 2022/23, making a total of £1.6bn of commitments despite the challenging economic environment,” says Louis Taylor, CEO at British Business Bank.

“After the pandemic, we have refocused on the UK’s future economic growth as we deliver against our new strategic objectives from 2023/24. These are: driving sustainable growth, backing innovation, unlocking potential, and building the modern, green economy.”

Accessible funding

The report’s findings are welcome news for SMEs who are struggling with financing options in the current economic climate. Research by Solopress found that 31% of British people who are open to starting a business haven’t because of the associated costs – and 22% cited the economic climate, too.

Financial backing would be the biggest help to aspiring business owners in starting a business, with 41.8% of respondents saying this would help them overcome barriers to entrepreneurship. Nearly three-quarters of those surveyed who don’t already own their own company dream of doing so one day.

Businesses don’t have the means to innovate without funding, so it’s important that financial support for SMEs continues to grow in the future from both the British Business Bank and other bodies – with government support essential. This is particularly true when it comes to net-zero targets, which are crucial for all businesses to partake in achieving, but are often costly to achieve.

“While governments pay lip service to the need for green tech to save the world, the would-be drivers of this sustainable innovation require urgent access to funding,” says Njy Rios, director of R&D incentives at Ayming UK.

“As the world continues to advance towards a climate crisis, governments need to address the funding gap with far greater resolve if policy is to be translated into practice. Until businesses are deriving economic value from prioritising sustainability, short-term economic pressures will always be a roadblock.”

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Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.