Lending already reaching smaller businesses for the British Business Bank on day 1
The UK has an economic development bank for the first time as the British Business Bank begins operations today as an independent organisation.
The Business Bank has already been making a difference for small and medium-sized businesses as part of the Department for Business, Innovation and Skills (BIS). £829m of new lending to smaller business has already been supported, and over 35,000 firms have benefited from the Business Bank’s programmes. In total, £10bn will be unlocked over the next five years for smaller businesses.
Business Secretary Vince Cable said:
“The Business Bank has kick-started much-needed improvements to access to finance for SMEs across the UK.
“Not only will the Business Bank help new challenger banks enter the market, it also promotes innovative lending like peer-to-peer finance, and will result in a more competitive lending market that works for the economy.”
Business Minister Matthew Hancock said:
“This is a landmark in British banking history. Our Business Bank has got huge potential to help small business thrive, right across the country. 35,000 small businesses have already benefitted from more than £800m.
“We are committed to making sure that Britain is the best place in the world to start and grow a business. We are backing business every step of the way because we know that our entrepreneurs are the hard-working heroes of the economy.”
British Business Bank Chief Executive Keith Morgan said:
“I’d like to thank Vince Cable and his ministerial colleagues for helping us secure strong support from across government, business and the finance sector. This is just the starting point for the British Business Bank, and we look forward to making a lasting difference to finance markets for smaller businesses as we grow and develop.”
There has been a recognised need for an organisation capable of supporting venture capital and promoting greater diversity of lending to small and medium-sized businesses. The British Business Bank has been developed drawing on the experiences of the Small Business Administration in the US, and the KfW bank in Germany. Policy-makers in Holland are now considering creating their own Dutch Business Bank, based on the British Business Bank.
As part of this approval, all the commercial activities of the Bank have been grouped into a new subsidiary called “British Business Bank Investments”. This subsidiary will manage a portfolio of investments in debt and equity instruments on fully commercial terms, including its funding, operations and investment activity. Other State-aided and agency activities remain managed under the group, British Business Bank plc. The new website for this commercial subsidiary is www.bbbinv.co.uk and for the group as a whole www.british-business-bank.co.uk .