British Business Bank welcomes chancellor of the Exchequer’s announcement of package of new measures to support SME’s
The British Business Bank welcomes the chancellor of the Exchequer’s announcement of a package of new measures to support smaller businesses ahead of her Mansion House speech next Tuesday.
This builds on the Bank’s increased mandate from government. With increased financial resources and new freedoms to allocate capital more effectively, the Bank is backing growing businesses to start and scale up, ensuring there is greater innovation, investment and opportunity across the country.
Growth Guarantee Scheme expansion
The British Business Bank’s flagship Growth Guarantee Scheme has received a £6.5bn uplift which will help an estimated 33,000 businesses across the UK’s Nations and regions to secure the finance they need to invest and grow. To date, the Scheme has delivered £3.7bn to UK businesses via 70 accredited partners, with around 70% of facilities supporting businesses outside of London and the South East.
The increase will unlock a further £6.5bn of market lending over the next four years. Some Growth Guarantee Scheme facility terms will extend from six to 10 years and business turnover eligibility will increase from £45m to £54m, supporting a broader range of scaling and high-potential smaller businesses.
More support for community lending to underserved founders
The Growth Guarantee Scheme uplift will also support expansion of community lending to underserved smaller businesses through the Bank’s Community ENABLE Funding programme. The programme is on track to reach its target of at least £150m of commitments to Community Development Finance Institutions by the end of the current financial year.
In addition, the British Business Bank is announcing SWIG Finance as the seventh accredited lender for its Community ENABLE Funding programme, with an allocation of £17.5m dedicated to supporting smaller businesses in the South West of England.
Discussions will begin later this year on crowding in private capital for the programme, with an ambition to grow support of up to £1bn of additional community smaller business lending. The Bank also welcomes renewed efforts to support the UK’s Community Lending sector, including through increased philanthropic funding from JPMorgan Chase Foundation and Bank of New York.
ENABLE Guarantees for Intellectual Property-rich smaller businesses
Many innovative businesses have significant value in intellectual property (IP), including intangible assets such as patents, trademarks, software, designs, copyright or know-how, but lack the physical collateral that lenders traditionally rely on. This can make it more difficult, or prohibitively expensive, for them to access debt finance.
Recognising this, the British Business Bank is making up to £500m of existing ENABLE Guarantee capacity available over an initial 12-month period to support lending to IP-rich smaller businesses. This is expected to help increase the availability of finance for IP-rich businesses, enable more competitive pricing and develop stronger lender capability to assess IP-driven business models.
New scheme for exporters
A new scheme, jointly run by UK Export Finance and the Bank, will support smaller businesses that export, or want to export. Expected to launch in Spring 2027, the new scheme will provide a route to working capital and growth finance, helping smaller exporters access international markets and scale their operations.
UK Export Finance estimates that thousands of already-exporting smaller businesses, and those with export ambitions, struggle to secure finance. The scheme is expected to support hundreds of millions of pounds of lending via a UK Export Finance guarantee on a portion of eligible portfolio-level losses.
The guarantee will enable lenders to optimise capital allocations and lend with greater risk appetite, providing more scalable cash lending facilities, such as term loans and working capital, to smaller exporting businesses. Lenders will retain a share of the risk.
Louis Taylor CEO, British Business Bank, said: “This growth package is great news for smaller businesses across the UK. The British Business Bank’s Growth Guarantee Scheme has a strong track record of enabling business growth, and the additional capacity and greater flexibility provided will help even more businesses, including those served by community lenders, to invest, grow and create additional jobs.
“It is great to be collaborating with UK Export Finance to help smaller businesses to export. This has the potential to transform UK economic performance and international competitiveness. Both these schemes, alongside the additional support for IP-rich businesses, will make a real difference on the ground, providing the finance needed for UK smaller businesses to realise their full potential.”
Chancellor of the Exchequer, Rachel Reeves, said: “Our plan for the economy has put Britain on a stronger footing – restoring stability, getting investment flowing, and delivering reform.
“We know that small businesses are the backbone of this economy, and for too long they have heard ‘no’ when trying to raise the funds they need to grow and create jobs across the UK.
“When they succeed, we all succeed, and today’s major package of reforms is the most significant step in years to unleash their potential.”
Business secretary Peter Kyle said: “Today we’re putting our weight behind Britain’s entrepreneurs and innovators, unlocking billions in additional lending to help thousands more small businesses start, scale and succeed because access to finance should never be the barrier between a good idea becoming a great British business.”
Kanishka Narayan, minister for AI and Intellectual Property said: “Intellectual Property is one of the most valuable but underleveraged assets on a company’s balance sheet. In recent years we’ve seen a shift from possibility to practical reality as lenders experiment with new Intellectual Property loan products. The British Business Bank’s commitment offers the opportunity to go even further – helping to shift Intellectual Property-backed finance from the margins to the mainstream.”
Tim Reid, CEO, UK Export Financesaid: “UK Export Finance exists to ensure no viable UK export fails for lack of finance, and this new joint scheme with the British Business Bank is a significant step towards furthering this mission.
“One of our main business priorities is to make it easier than ever for SMEs to harness the power of international markets. By combining access to finance, digital services and targeted support with the British Business Bank’s expertise in unlocking lending, we can support a new generation of exporters.”
Martin McTague OBE, national chair, Federation of Small Businesses, said: “Access to finance is a fundamental need for small businesses looking to grow, so we are pleased to see our calls to amp up the British Business Bank’s Growth Guarantee scheme have been heard. Expanding resources and extending payment terms will help small businesses build wealth in every part of the country.
“Small firms need as many finance options available to them as possible right now. Removing the barriers which currently restrict building societies’ loans to small firms, and widening export finance to include a portfolio guarantee, will help ambitious businesses and entrepreneurs enter new markets, and grow and succeed. Altogether, the package of reforms announced will help small businesses to fund their dreams of expansion, helping to nurture economic growth across the UK.”
David Postings, UK Finance CEO, said: “The expansion of the Growth Guarantee Scheme, alongside the wider support for innovative firms and exporters, is very welcome news and reflects calls made by UK Finance and our members. It demonstrates a clear commitment from the government to improving access to finance and will materially benefit small and medium sized businesses up and down the country. These businesses are vital to the UK economy, and the changes will unlock billions in additional lending capacity to support their growth.”
Theodora Hadjimichael, CEO, Responsible Finance, which represents the UK’s community development finance institutions (CDFIs), said: “Many great businesses struggle to get the funding they need, so Community Development Finance Institutions are a lifeline. They have a long history helping businesses to grow and create jobs but have not always been able to meet demand.
“GGS and the Community ENABLE Funding programme are fundamental to enabling our lending, and this fantastic news will mean CDFIs can support more small businesses, so entrepreneurs can get the right finance at the right time and grow economies across the UK.”