Sheffield-based British Business Bank, the UK government’s economic development bank, said it has agreed a £10 million Tier 2 capital facility with Chester-based specialist agricultural bank Oxbury, further strengthening its capital position as it marks five years since commencing lending to the UK food and farming sector.

This builds on a £25 million facility provided in 2022, bringing the total funding to £35 milllion.

Oxbury’s lending focuses on enabling smaller businesses within the food and farming sector to invest in land, infrastructure, automation, storage and working capital.

“Since the first Tier 2 facility in 2022, Oxbury has grown substantially, building a large and diversified savings base that supports its expanding lending portfolio,” said the British Business Bank.

“Oxbury reports that it is now responsible for one in five new farm loans in the UK on a rolling 12-month basis and is approaching a 10% share of new agricultural lending nationally.

“Oxbury’s regulatory capital structure combines a shareholder base with deep roots in the food and farming sector and long-term institutional funding, including Tier 2 facilities provided by the British Business Bank.

“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.”

Richard Bowen, Managing Director, Direct Financial Institution Solutions, British Business Bank, said: “We are delighted to increase our Tier 2 funding with Oxbury Bank and strengthen our relationship with them as a delivery partner.

“We have completed several transactions with Oxbury across our Banking business since 2022, which reflects the diversity of finance types we want to provide to the farming economy.

“We hope this transaction enables Oxbury to support as many food and farming businesses as possible, and we look forward to seeing the growth this facility will bring to the farmers who access it.”