The British Business Bank (BBB) has set out a five-year plan in response to updated directions from the UK Government to alter how smaller businesses across the nation access finance.
Following an increase in its permanent financial capacity to £25.6bn ($33.5bn) earlier this year, BBB will use its investment and banking businesses, along with its business development function, to implement several objectives over the next five years.
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Among its principal actions, BBB proposes to expand its annual funding activity by two-thirds, which is expected to bring in around £26bn from private capital, as well as £13bn of its own resources.
In addition, as much as £10bn in lending to smaller businesses will be enabled through guarantee schemes.
BBB plans to provide initial capital for transactions that support new technologies where the UK aims for a leading position globally.
The increased risk tolerance at portfolio level will focus on areas identified in the industrial strategy.
It intends that more than 60% of its venture and venture-growth investment be directed towards scale-up businesses and plans to make larger individual investments above £100m in selected growth-stage funds.
The intention is for more scale-ups seen as significant to secure domestic funding required for expansion within the UK market.
BBB will deliver 85,000 start-up loans and allocate £150m to community development finance institutions to reach business owners.
Plans include increasing regional investment, supporting new angel networks in regional markets, developing science and innovation clusters, and launching two new regional investment funds in East and South-East England.
BBB CEO Louis Taylor said: “By 2030, our ambition is clear: a more dynamic and inclusive finance ecosystem, where innovative and 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.
“Our 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.”
