Jonathan Reynolds, UK Secretary of State for the Department for Business and Trade, announced that £6.6 billion of new capital is being committed by the British Business Bank to boost growth, marking a major step change in financing to support smaller businesses to start and scale in the UK.
Sheffield-based British Business Bank is the UK government’s economic development bank.
A new £4 billion initiative, British Business Bank Industrial Strategy Growth Capital, will be invested through the bank’s existing capabilities across eight growth-driving sectors — advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services — crowding in another £12 billion of private capital.
“British Business Bank Industrial Strategy Growth Capital will therefore deliver around £16.0bn of capital to invest in smaller businesses and innovation across the eight Industrial Strategy sectors over the next four years.” said the bank.
“As part of the Spending Review settlement, the British Business Bank will also be committing £2.6bn of capital to support entrepreneurs wherever and whoever they are to access capital, driving the growth of smaller businesses across the UK’s Nations and regions, including high-growth innovation clusters across the country.
“This follows the recent announcement at the Spending Review of the increase in the British Business Bank’s total financial capacity to £25.6bn, which will enable a two-thirds increase in investments to around £2.5bn each year.
“This investment is expected to crowd in tens of billions of pounds of additional private capital and will support the most innovative UK businesses to access the capital they need to start, scale and stay in the UK.
“Also confirmed were reforms to the British Business Bank’s governance and financial arrangements which will be implemented by the end of this financial year.
“These will place the Bank in a position to successfully deliver the increased level of investment activity and will mean the Bank has a newly permanent and more fungible capital base, with greater flexibility to re-invest returns over the long term to increase growth and prosperity across the UK.
“This £16.0bn of permanent capital1, which will be invested through economic cycles, will help underpin investment and confidence in the UK’s growth and innovation economy.”
British Business Bank CEO Louis Taylor said: “We welcome today’s announcement by the Secretary of State to deliver British Business Bank Industrial Strategy Growth Capital, as well as the reforms to the Bank’s governance and financial framework.
“Using our market expertise and reach, we have a critical role to play in supporting smaller businesses in the eight growth-driving sectors to grow and stay in the UK.
“To deliver the government’s growth mission it is also critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located across the Nations and regions of the UK.
“This is a strong endorsement of the Bank’s 10-year track record, market access and capabilities, including our position as the largest investor in UK venture and venture growth capital funds and the most active late-stage investor in UK life sciences and deeptech.”