British Business Bank announces increase in Tier 2 capital funding to £35m for specialist agricultural lender Oxbury
The British Business Bank has agreed a £10m Tier 2 capital facility with specialist agricultural bank Oxbury, further strengthening its capital position as it marks five years since commencing lending to the UK food and farming sector. This builds on a £25m facility provided in 2022, bringing the total funding to £35m.
The announcement reflects the British Business Bank’s commitment to small and medium-sized businesses, which are at the heart of the UK’s food, farming and agricultural economy.
Oxbury’s lending focuses on enabling smaller businesses within the food and farming sector to invest in land, infrastructure, automation, storage and working capital.
Since the first Tier 2 facility in 2022, Oxbury has grown substantially, building a large and diversified savings base that supports its expanding lending portfolio. Oxbury reports that it is now responsible for one in five new farm loans in the UK on a rolling 12-month basis and is approaching a 10% share of new agricultural lending nationally.
Oxbury’s regulatory capital structure combines a shareholder base with deep roots in the food and farming sector and long-term institutional funding, including Tier 2 facilities provided by the British Business Bank.
The British Business Bank’s Tier 2 capital note investments aim to be a catalyst for recipient banks as they grow, increasing the supply and availability of finance to small and medium-sized businesses across the UK.
Richard Bowen, managing director, Direct Financial Institution Solutions, British Business Bank, said: “We are delighted to increase our Tier 2 funding with Oxbury Bank and strengthen our relationship with them as a delivery partner. We have completed several transactions with Oxbury across our Banking business since 2022, which reflects the diversity of finance types we want to provide to the farming economy.
“We hope this transaction enables Oxbury to support as many food and farming businesses as possible, and we look forward to seeing the growth this facility will bring to the farmers who access it.”
Nick Evans, co-founder and managing director of Oxbury Bank, said: “We are extremely grateful to the British Business Bank for its continued support. They backed Oxbury in 2022, relatively soon after we began lending, and this additional facility reflects the progress made over the past five years.
“Oxbury was founded to provide specialist finance to the UK’s food and farming sector. Today we are executing one in five new farm loans in the country and are approaching a 10% share of new agricultural lending. That growth has been underpinned by disciplined underwriting, strong credit performance and a shareholder base comprised overwhelmingly of farmers and landowners.
“The combination of farmer-backed capital and government-backed support provides a strong platform for our continued, prudent growth.”