Unlocking the potential of diverse entrepreneurs – Factsheet

The British Business Bank is the UK's economic development bank. Our mission is to drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy, by supporting access to finance for smaller businesses.

We recognise that there is commercial and economic opportunity in investing in groups that are currently underrepresented across the business and finance landscape. Diverse entrepreneurs experience unique challenges from starting to growing their businesses, including barriers in accessing both debt and equity finance. This represents huge untapped economic potential.

icon with lightbeam arrows in the shape of the uk map in various colours

In 2022, the Bank established a strategic objective to unlock growth by ensuring that entrepreneurs can access the finance they need regardless of where and who they are. By unlocking this potential, we will enable more entrepreneurs and business owners to deliver the innovations that will drive sustainable growth and contribute to the goal of a Net Zero economy by 2050.

To achieve this, we are:

  • Integrating ESG factors throughout the investment lifecycle and across all our funding programmes. This will be operational in April 2023 and will ensure that a commitment to diversity is embedded across all Bank investment processes.
  • Expanding our reporting frameworks to report annually on the progress of Bank programmes in reaching diverse entrepreneurs, as a responsible investor and signatory to the Principles for Responsible Investment (PRI).
  • Delivering research to understand where the barriers are, and identify clear actions that finance providers can take to allocate more of their funding to underrepresented founders, to help guide improvements across the wider industry.

By improving our data collection and transparency, sharing best practice on how to reach underserved founders, and considering how Bank programmes can be part of the solution, we are working to break down existing barriers and unlock the full potential of the UK’s diverse entrepreneurs.

The Challenge

Small business owners experience significant inequalities in access to finance and entrepreneurial outcomes dependent on characteristics including gender, ethnicity and disability.

The British Business Bank identifies and addresses market gaps in small business finance. Diverse entrepreneurs experience unique challenges from starting up to growing their business, including barriers in accessing both debt and equity finance.


Though Ethnic Minority-led businesses are more open to using finance, they are also more likely to be discouraged from doing so. Key reasons for discouragement include:

  • expecting to be rejected;
  • not knowing where to find appropriate finance; and
  • concerns over the decision taking too long or being too much hassle.

Female-led businesses are also more likely to be discouraged than male-led businesses and typically cite similar factors. Ethnic Minority-led businesses that do apply for finance also face notably higher rejection rates.


Awareness of equity and venture capital (VC) is lower for both female-led and Ethnic Minority-led businesses. Even among those who are familiar with alternative sources of finance, female-led firms are less likely to consider using VC and equity, and often seek less funding.

The underrepresentation of both women and people from Ethnic Minority backgrounds in investing teams is also likely to contribute to the stark underrepresentation of female-led and Ethnic Minority-led businesses receiving equity investments, due to the importance of networks and warm introductions in the equity space.

Facts and figures


received by all-female founder teams, for every £1 of equity investment in the UK in 2021

20% of investment professionals

in Europe are women

20% of Ethnic Minority-led businesses

 were discouraged from applying for finance in 2021, compared to 8% of White-led businesses


of Black entrepreneurs meet their non-financial aims, compared to nearly 70% of White entrepreneurs

What we’re doing

While the Bank has a few programmes that engage directly with entrepreneurs and small businesses, the majority of our programmes are delivered through private sector partners. We provide equity investment and loan guarantees to a wide range of private sector finance providers, who directly invest in small businesses.

Helping our delivery partners reach diverse entrepreneurs

We believe that diverse investment teams make better investment decisions, and we want to ensure the finance providers we work with are making their own strides in diversity.

The Bank is currently integrating ESG factors throughout the investment lifecycle and across all our funding programmes, to ensure we work with finance providers that can demonstrate their commitment to diversity, and support them to strengthen these commitments.

Our ESG rollout, due to be completed by April 2023, includes embedding questions about diversity into every stage of the investment process. In allocating Bank funding, we will strongly favour finance providers that are taking active steps to encourage diversity in their own teams and investments. Considerations will include whether the finance providers:

  • have diverse investment teams themselves,
  • have policies relating to diversity and inclusion, and
  • are willing to provide data on the diversity of their investments and report on this over time.

We will also support the finance providers we work with to strengthen their diversity commitments, both through our ongoing direct engagement with them and by working with the market to understand and develop best practice.

Illustration of a man and woman shaking hands

Investing in diverse entrepreneurs

Many Bank programmes are designed to ensure small business finance is reaching parts of the market that have otherwise gone underserved. For example, the Start Up Loans programme offers unsecured personal loans of up to £25,000 to entrepreneurs who have been unable to secure finance from other sources, and has a good track record of reaching female and Ethnic Minority founders. Through our partnerships with X-Forces and The Prince’s Trust, we also deliver targeted start-up finance support to ex-services personnel and young people, and we are exploring further partnerships to help us deliver more Start Up Loans to underserved entrepreneurs.

Increasingly, private sector investors are developing investment strategies focused on reaching diverse founders, and we encourage these firms to apply for support from the Bank’s equity programmes. For example, through the Enterprise Capital Funds programme, the Bank has made a cornerstone investment in Ada Ventures' £27m fund, which focuses on investing in overlooked founders who are building companies that focus on diverse customer groups.

41% of Start Up Loans have gone to female entrepreneurs

Who make up 21% of zero employee businesses

21% of Start Up Loans go to Ethnic Minority entrepreneurs

Who make up 4% of the overall SME population

77% of the Future Fund’s funding

Went to companies with mixed gender senior management teams, totalling over £886 million

21% of Bank-supported equity deals in 2019-21

Went to a company with at least one female founder

Yorkshire Dama Cheese - Razan Alsous with her husband and three children.

Case Study: Yorkshire Dama Cheese

After travelling from war-torn Syria with her husband and three children, Razan Alsous settled in Huddersfield. Despite being well qualified for a job, she was unable to find work because she had no citizenship. Spotting an opportunity to enter the Halloumi cheese market – worth over £35 million in the UK – Razan took out a £2,500 Start Up Loan and set up her own company Yorkshire Dama Cheese, making Halloumi cheese.

Razan said: “We struggled to get the business up and running at first, but thanks to support from The Start Up Loans Company I was able to start making and selling our products on a larger scale.” Razan’s business has gone from strength to strength. She has won The World Cheese Award Gold Prize, finished 6th in a Yorkshire search for the county’s best entrepreneur, and has taken part in filming with the TV chef James Martin for his BBC1 programme. 

Read more about Razan’s story.

Case Study: Atomico VC

Atomico is a tech-focused venture capital firm with a central commitment to building a more diverse and inclusive technology ecosystem. It runs an office hours programme to increase access for underrepresented founders, has published a practical guidebook for tech entrepreneurs to develop DEI strategies, and actively recruits and retains diverse talent. Across its investment team, 68% of colleagues come from an underrepresented background, and 45% of its investment Partners are female. Atomico has made a number of LP commitments to first time fund managers focusing on underrepresented founders and, in its active portfolio, targets that 40% of its investments will be in companies with diverse founding teams.

In February 2020 the Bank's commercial subsidiary British Patient Capital (BPC) committed £50m to Atomico’s fifth fund. BPC, which manages a £2.5bn programme investing into UK focused venture and growth capital funds, favours funding applications from teams that can demonstrate a strong commitment to DEI.

Niklas Zennström, Founding Partner and CEO of Atomico, said: “As well as providing long term patient capital, British Patient Capital’s strong focus on diversity and inclusion proved to us that they are a partner aligned with Atomico’s mission and values.”

icon of a computer with charts and tickboxes on it

Improving the data and information landscape

Data is essential to help us understand exactly which businesses are struggling to access small business finance and why. It also ensures we can build the right responses and assess what works. As a founding signatory to the ‘Investing in Women Code’ (IWC), the British Business Bank collects data on the amount of equity finance reaching female entrepreneurs. We are also developing research to identify clear actions that finance providers can take to allocate more of their funding to underrepresented founders.

In doing so, the Bank will support our private sector partners and the wider industry to improve the diversity of their teams and investments. Recognising the importance of data sharing in identifying actions for progress, we want to be transparent as we take steps to improve the diversity of the investments we support. The Bank is expanding its reporting frameworks to report annually on the progress of Bank programmes in reaching diverse entrepreneurs, as a responsible investor and signatory to the Principles for Responsible Investment.

Case Study: Investing in Women Code

The Bank is a founding signatory to the ‘Investing in Women Code’ (IWC), a commitment to support the advancement of female entrepreneurship in the UK, by improving female entrepreneurs’ access to tools, resources and finance from the financial services sector. The IWC helps drive the change necessary to improve venture capital markets for female founders, so they can raise the capital they need for their businesses to reach their full potential. The Bank manages the Code, on behalf of BEIS, for Venture Capital (VC) funds.

VC Code signatories have more female representation in their investment teams compared to the wider industry, and outperform the wider market on deal numbers for investment in women-led businesses – 34% of deals went to teams with at least one female founder, compared to 24% of VC deals across the wider market in 2021.

We can go further, and we have piloted the collection of ethnicity data as part of the Code. We are working with partners to explore what role the Code can play in exploring broader diversity characteristics, and ultimately move from data collection to data-driven action.

Read the second annual progress report.

Case Study: Partnership with the RNIB

In January 2022 the Bank announced a new partnership with the Royal National Institute of Blind People (RNIB), to help break down barriers to the business world for people with sight loss. 28% of blind and partially sighted people have said that information from banks was never accessible and there are 11,000 people with sight loss in the UK actively seeking work. We want to ensure that anyone who wants to embark on an entrepreneurial journey can access the resources that will enable them to do so.

As a first step, the RNIB is producing Braille, Audio and Large Print versions of existing documents for the Bank’s Start Up Loans programme, and will support the Bank in providing accessible journeys across all of its customer facing channels. This will involve changes to the Bank’s websites and a review of the Start Up Loans application process, as well as the provision of training to staff.

Read more about this partnership.

British Business Bank research

The British Business Bank has published several research reports exploring diversity in access to finance:

UK VC & Female Founders Report

Find the UK VC & Female Founders report here, which identifies the barriers faced by female-led firms in accessing venture capital.

UK VC and Female Founders ReportDownload the report (.pdf, 971.8kb)

Alone together: Entrepreneurship and diversity in the UK

Our report on entrepreneurship and diversity in the UK examines the profound effects ethnic and economic background, gender and place have on entrepreneurial opportunities and outcomes.

Alone together: Entrepreneurship and diversity in the UK ReportDownload the report (.pdf, 2.65mb)

Small Business Finance Markets report 2022

The Small Business Finance Markets Report 2020/21 explores the impact of Covid-19 on small businesses and provides a comprehensive review.

Small Business Finance Markets report 2021/22Small Business Finance Markets report 2021/22 (.pdf, 2.9mb)

Small Business Equity Tracker 2022

Our Small Business Equity Tracker 2022 Report provides a comprehensive picture of equity funding conditions for smaller businesses across the UK.

Small Business Equity Tracker 2022Download the report (.pdf, 1.79mb)

Get in contact

If you would like to meet to discuss the British Business Bank’s work breaking down barriers to small business finance, please contact us below:

Public Affairs email us