British Business Bank sets out five-year plan to transform small business finance

The British Business Bank has published a new five-year strategic plan designed to deliver a step change in how smaller businesses across the UK access finance, following an expanded mandate and increased government backing.

The plan, unveiled today, responds to the Government’s decision earlier this year to increase the Bank’s permanent financial capacity to £25.6 billion and give it greater flexibility to support high-growth and strategically important companies. The Bank said the updated mission reflects a drive to help businesses “start, scale and stay” in the UK, supporting long-term economic growth.

Under the strategy, the Bank will significantly expand its investment activity, take on higher levels of portfolio risk and direct more support to scale-ups, regional clusters and science-based industries identified in the Government’s Modern Industrial Strategy. It intends to increase annual deployment by two-thirds, unlocking a projected £26 billion of private capital alongside £13 billion of public funding, and enabling up to £10 billion in small business lending through guarantees.

A major focus of the plan is supporting fast-growing firms. The Bank said it would target more than 60% of its venture and growth-stage investment towards scale-ups, and gain the ability to write £100 million-plus cheques to the most promising funds. It will also increase the size and number of direct investments to ensure strategically important UK companies can raise domestic capital rather than turning overseas.

To support regional and inclusive growth, the Bank plans to deliver 85,000 Start Up Loans over the next five years and invest £150 million in Community Development Finance Institutions to help underserved entrepreneurs. Two new regional investment funds will be created in the East and South-East of England, building on the Bank’s existing regional initiatives. It also intends to support new regional science and innovation clusters and establish new angel investment networks.

The Bank will also undergo structural reform, streamlining internal processes and updating its operating model to speed up decision-making and work more flexibly in line with its increased risk appetite.

Louis Taylor, Chief Executive of the British Business Bank, said the plan’s ambition was to reshape the UK finance ecosystem 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,” he said. Taylor added that the plan is expected to support around 180,000 businesses, help create 370,000 jobs, and generate £68 billion in economic benefit.

Business Secretary Peter Kyle said the reforms would unlock growth suppressed by lack of access to capital.
“Our small businesses have ambition and bright ideas in abundance, but too often they lack the finance they need to reach their full potential,” he said. “This has to change — and with this new five-year plan it will. The Bank is increasing its pace of investment by two-thirds, with a £4 billion boost for the most promising businesses in our Industrial Strategy sectors.”

The plan is structured around four strategic objectives set in October: supporting high-potential businesses in priority sectors; improving access to finance for smaller firms; unlocking potential across people and places; and mobilising institutional capital at scale.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.