British Business Investments – Full year results for the period ending 31 March 2020

British Business Investments supports the development of more diverse debt and equity finance markets throughout the UK. To increase the choice of finance for SMEs, British Business Investments provides funding to a wide range of finance providers – including peer to peer lenders, small-cap private debt funds, challenger banks, asset finance providers, equity funds-of-funds and regionally-based early stage investors.

In 2019/20, British Business Investments continued to deliver strongly against the four objectives set by its parent, British Business Bank plc:

1. Increase the supply and choice of finance to small and medium sized businesses across the UK: As at 31 March 2020, British Business Investments had made commitments of over £2.5bn to finance providers to support funding to UK SMEs, an increase of 26% year-on-year. Our funding helps unlock additional capital for our delivery partners, with third parties investing a further £11.8bn alongside us, to produce total funding of almost £14.4bn.
2. Help to create a more diverse finance market: In 2019/20, British Business Investments made 15 commitments totalling £547m, including to nine new delivery partners. This increases our total portfolio investments to 59, through 48 different delivery partners.
3. Identify and help to address regional imbalances in access to finance: British Business Investments is providing funding to more than 37,000 businesses, 71% of which are based outside of London and the South East.
4. Manage taxpayer’s money efficiently, whilst generating a commercial rate of return: In 2019/20, British Business Investments delivered gross income of £35m and pre-tax profit of £22m. Prior to the Covid-19 pandemic, British Business Investments had been on track to achieve its targeted gross return on invested capital of 5.6%. Due to valuation adjustments and additional expected credit loss provisions made in Q4 2019/20 as a result of COVID-19, the actual gross return for the year was 2.7%.

Judith Hartley, CEO, British Business Investments, said: “We are pleased to report strong growth during 2019/20 and a record year in terms of new commitments and diversification of our portfolio. This has enabled us to broaden our reach across alternative finance markets and extend the support we provide to growing businesses outside of London and the South East. Our returns have however been affected by the negative impact of the Covid-19 pandemic in the fourth quarter. This means our overall financial return in 2019/20 is lower than in prior years though still positive.”

Francis Small, chair of British Business Investments, said: “Excluding the exceptional impact of Covid-19 on our financial return, British Business Investments has once again delivered on its overall objectives. The Covid-19 pandemic has had a devastating impact on many of the UK’s small and medium-sized businesses. We have worked closely with our delivery partners and have increased our commitments to them, as they have continued to provide essential finance to the UK’s SMEs. It is important that this work continues so that businesses across the UK have access to the funding they need to support their working capital requirements and plans for growth.”

Download the British Business Investments Annual Report and Accounts 2020