What is the British Business Bank and how can it help my business?

Small and medium-sized enterprises (SMEs) form the backbone of the UK economy - driving innovation, creating jobs and boosting economic growth. 

However, finding finance can be tough, especially when traditional bank loans are not readily available. A recent survey from the British Chambers of Commerce found that 70% of businesses have not accessed finance from an external provider in the past twelve months. 

That’s where the BBB comes in. Established in 2014 to support SMEs, it offers a range of financial programs and initiatives.

How the British Business Bank Works? 

• Funding and Budget Allocation - The BBB receives funding from the government and invests it in various finance programmes, such as the Start Up Loans programme and in investment portfolios like the Future Fund.

• Programme Design and Implementation - The BBB identifies specific gaps in the finance market, such as the lack of growth capital for innovative companies and the challenges faced by start-ups in securing initial funding. To address these needs, the BBB develops tailored finance programmes, including debt and equity financing. It works with a wide range of financial institutions, from big banks like Barclays to alternative finance providers like Funding Circle and Allica Bank, to deliver these programmes effectively.

• Role of Delivery Partners - Delivery partners run the BBB finance programmes, assess applications, allocate funds and provide ongoing support to SMEs. Their sector-specific expertise and local market knowledge are invaluable to SMEs looking for tailored finance solutions.

Financial Programmes and Support 

The BBB runs seven finance programmes aimed at improving SMEs’ access to finance.

Debt programmes:

• Start-Up Loans - Access to funding through the capital markets for smaller lenders, meaning they can provide more finance to businesses. 

• Growth Guarantee Scheme - Support for access to debt finance for UK businesses as they look to invest and grow. 

• Bank Referral Scheme - Helps small businesses find funding from alternative finance providers such as Funding Options.

Equity Programmes:

• Angel CoFund - Investing alongside angel investors to increase the volume of early stage finance available to smaller businesses.

• Nations and Regions Investment Funds - Equity finance in the North, Midlands, Cornwall and Isles of Scilly, helping to make regional finance markets work better for small businesses.

• Future Fund: Breakthrough - Direct investment programme which supports companies that are research and development (R&D) intensive and technology-led.

• Life Sciences Investment Programme - Initiative to provide equity finance to high-potential UK life sciences companies. If you want to find out further information, simply email them using the link above. 

Financial Guarantees:

• Enterprise Finance Guarantee - Government-backed debt finance for viable smaller businesses lacking security.

How to Apply and Access Finance 

You can access finance through the BBB supported programmes by applying directly through their partners.

• Research and Preparation: Identify the most suitable programme based on your business needs. Check the eligibility criteria and application processes on the BBB’s official website. Keep in mind that each financial programme has its own application process, so be sure to review the specific requirements for the programme you choose. 

• Application Submission: Fill out the application form accurately, providing full details about your business, financial projections and how the funding will support your growth.

• Engage with Delivery Partners: Engage with partner institutions to understand their specific requirements and how they can assist with your application.

• Monitor and Follow Up: Track your application’s progress, provide additional information if requested and maintain open communication with delivery partners.

How SMEs Can Benefit 

Diverse Finance Options - The BBB programmes offer various finance options beyond traditional loans, including equity investments and innovative solutions for different growth stages.

Support for Regional Development - The BBB helps reduce regional imbalances in access to finance by creating programmes specific for the North, Midlands and Cornwall regions. This supports local economies and SMEs outside major urban centres.

Inclusive Growth - The BBB promotes diversity and inclusion in the SME sector through initiatives such as Investing in Women Code and Investing in Ethnic Minority Entrepreneurs, addressing the unique challenges faced by these groups. 

The Future of the British Business Bank: What Labour Has in Store

With Labour now leading the country, the BBB is set for transformative changes to better support SMEs. Currently, the BBB’s business plan is reviewed and approved annually by the government, which can hinder long-term planning. Labour proposes granting the BBB operational independence by extending the review period of its business plan. This aims to better equip the BBB in fulfilling its mission of supporting SME growth and innovation. 

Labour’s strategy to leverage external funds could significantly enhance the BBB’s capacity to support SMEs. This includes unlocking funds from Defined Benefit pension schemes, which hold nearly £3 trillion in assets. Labour also plans to work with the BBB to increase investment for women and ethnic minority founders, promoting inclusivity and diversity in business ownership and leadership.  By creating a framework that allows these schemes to invest alongside the BBB, Labour aims to reduce informational barriers and increase the financing available to BBB recipients. Further information regarding the BBB can be found in Labour’s start-up review.

However, detailed plans for these measures are still forthcoming. The upcoming Autumn Statement is expected to provide clarification on these plans.