British Business Bank announces £15m increase in Tier 2 capital funding with Allica Bank
The British Business Bank has agreed a £15m Tier 2 capital facility with Allica Bank, a full service digital bank for established small and medium-sized businesses. This builds on a £30m facility provided in 2022, bringing the total Tier 2 capital funding to £45m.
The facility will provide capital for up to £150m of additional smaller business lending.
Allica is a bank built solely to meet the needs of established businesses with 5-250 employees. Since receiving its banking licence in 2019, it has provided over £4bn of lending to over 25,000 smaller businesses, with over £5bn in deposits.
Recently, Allica has been valued at close to $1.2bn as part of its Series D capital raise, and the British Business Bank’s support has contributed to helping Allica reach this notable milestone.
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. A report last year by economic research consultancy Oxford Economics revealed that for every £1m Allica lent to established businesses, it contributed £2.4m in GDP, 35 jobs, and £600,000 in tax revenue.
Richard Bowen, managing director, Direct Financial Institution Solutions, British Business Bank, said: “Allica has grown substantially since our last Tier 2 capital transaction in 2022. Having a delivery partner like Allica in the UK lending ecosystem supports our mission of delivering economic growth for the UK, and we are excited that this transaction will support Allica in continuing to support its customers’ growth journeys in the future.
“It’s encouraging to see the breadth of smaller businesses Allica has supported since then, as well as the work it has done representing the smaller business community, while establishing a strong brand profile.”
Richard Davies, CEO of Allica Bank, said: “The extension of our partnership with the British Business Bank is another important step in backing the UK’s established SMEs – the businesses that power the real economy but are too often overlooked.
“This additional capital allows us to go further and faster in supporting these businesses with the funding they need to grow, invest and create jobs. It’s a strong example of how the right partnerships can help unlock more finance for established businesses and, in turn, drive broader economic growth across the UK.”