In addition to boosting the supply of finance to smaller businesses, it is equally important to ensure that the supply is spread across a mix of products, a range of providers and an array of funding sources. Diversity of finance options can improve access to finance for a wider range of businesses, improve the terms and ease of use of finance for small businesses, and increase the likelihood that firms obtain the most appropriate form of finance for their needs.
The primary metric we use to measure our performance on this objective is the proportion of the stock that we facilitate through smaller finance providers. Increasing provider diversity also helps with the other dimensions of a diversified finance market as different providers will offer different products and tap different sources of funding.
Over 2017/18, we onboarded 21 new delivery partners – nine across our VC and growth capital programmes, five in the Investment Programme, five with ENABLE and two for EFG. This takes the total number of providers that we work with to over 120.
We continue to work with challenger banks, adding three new partners in 2017/18:
- £30m Tier 2 capital facility with Atom Bank through the Investment Programme
- An ENABLE Guarantee for United Trust Bank to increase its funding to new build and redevelopment projects undertaken by SME housebuilders and developers
- An ENABLE Guarantee for Cambridge and Counties Bank to target smaller businesses.
In 2017/18, we provided a further £5m to Liberis, a merchant cash advance provider. This is on top of the £5m initially awarded in 2016. In addition to the FinTech providers that we have supported directly, we have also invested a further £103m to 73 FinTech firms through the equity funds that we have supported to date.
Northern Powerhouse Investment Fund
Addressing the regional disparities in access to finance remains a key focus for the Bank. We celebrated the first anniversary of the £400m Northern Powerhouse Investment Fund in February 2018.
Midlands Engine Investment Fund
The £250m Midlands Engine Investment Fund launched its debt and small business loans funds in August 2017, and its equity and proof-of-concept funds in February 2018.
Cornwall and Isles of Scilly Investment Fund
We have launched the £40m Cornwall and Isles of Scilly Investment Fund in June 2018.
Asset finance and asset based lending
We continued our support for these finance types in 2017/18, announcing commitments of over £36m to two providers – Shire and IGF – through our Investment Programme, and over £140m to four providers – Shire, Tower Leasing, Simply Asset Finance and 1pm – through ENABLE Funding. We also accredited two providers – Hitachi Capital (UK) and Aldermore – under the new asset finance variant of our flagship Enterprise Finance Guarantee programme.
Direct lending funds
In 2017/18, British Business Investments made five new commitments to direct lending funds, each focused on different strategies. These included a commitment to Shard Credit Partners’ first fund, enabling it to start lending, as well as commitments to follow-on funds from Beechbrook, Growth Capital Partners, Harbert and TDC. By the end of 2017/18, these new funds had made investments in 19 UK SMEs.
KiTE SURF & SUP Co
An ex-competitive windsurfer with a huge passion for watersports, Christine Johnson quit her office job to pursue her dream of becoming a kitesurfing instructor.
One year later, after Christine completed her kitesurfing instructor course, she put her learnings into practice and founded KiTE SURF & SUP Co, a kitesurfing school and online shop based in beautiful Brighton and Worthing.
After two years of steady and successful growth, fast financial support from 126 investors through British Business Bank partner Funding Circle enabled Christine to grow her online shop and update her website to develop the company even further.