Chancellor Rachel Reeves has announced that the financial capacity of the British Business Bank will be increased to £25.6bn as part of the government’s Spending Review.
This will enable a significant two-thirds increase in investments to around £2.5bn each year and is expected to crowd in tens of billions of pounds of private capital.
The state-owned economic development bank said the increase will enable it to help deliver the UK’s modern Industrial Strategy and boost growth, marking a major step change in financing to support smaller businesses to start and scale in the UK.
The British Business Bank, based in Sheffield, is the largest investor in UK venture and venture growth capital funds.
The firm’s equity programmes have supported 22 of the UK’s 41 unicorns.
Reforms to the British Business Bank’s governance and financial arrangements have also been confirmed and will be implemented by the end of this financial year.
These will place the bank in a position to successfully deliver the increased level of investment activity and will mean the bank has a newly-permanent capital base.
The company has also been operating the £660m Northern Powerhouse Investment Fund II (NPIF II), which covers the entire North of England and provides loans from £25,000 to £2m and equity investment up to £5m to help a range of small and medium sized businesses.
Louis Taylor, CEO, British Business Bank, said: “As the public financial institution with responsibility for supporting the growth of smaller businesses across the UK, the British Business Bank will play a critical role in delivering the UK’s upcoming modern Industrial Strategy.
“We welcome today’s announcement by the Government, which is a strong endorsement of the British Business Bank’s 10-year track record, market access and capabilities, including our position as the largest investor in UK venture and venture growth capital funds and the most active late-stage investor in UK life sciences and deeptech.
“To deliver the Government’s growth mission it is critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located.”
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