Over the course of the last financial year, we’ve increased our delivery of finance for smaller businesses, taking on new responsibilities while enabling ever greater supply and diversity of finance.
The British Business Bank was set up at the end of 2014 to make finance markets work better for smaller businesses. Over 74,000 businesses across the UK now benefit from our programmes, which increase both the range and the amount of finance available. Smaller businesses at all stages – whether startups, scaleups or well-established firms – need the right sort of finance to realise their potential. We help the market meet those needs more effectively.
During 2017/18, we saw money flowing to smaller businesses from our national and regional programmes. Against our four Key Performance Indicators:
- we increased the total stock of finance provided through our programmes by 33%
- we supported further diversity of finance, delivering 96% of our support through smaller banks, non-bank lenders, alternative lenders and equity investors
- we expanded how we promote information about finance options, helping businesses to become more aware of, consider and explore their options
- we achieved a 4.7% adjusted return on capital, exceeding the target set by our government shareholder.
The financial statements for British Business Bank plc show an operating profit of £48.3m (before provision for ECF loan commitments) and a profit before tax of £11.3m.
Our first two regional funds – the Northern Powerhouse Investment Fund and the Midlands Engine Investment Fund – are now delivering critically-important debt and equity finance to boost their respective regional economies. A third regional fund for Cornwall and the Isles of Scilly, a new angel investment fund focused outside of London and the South East, and our forthcoming Regional Manager Network will address further the well-documented imbalances in regional finance.
We are continuing to deliver high volumes of funding through our well-established programmes such as the Enterprise Finance Guarantee. Alongside this, 2017/18 saw the Bank increasingly focus on scaleup businesses. As well as making total commitments of £285m through our Venture Capital (VC) Catalyst, Enterprise Capital Funds and Angel CoFund – providing much-needed equity finance – the government asked us at Autumn Budget 2017 to deliver a significant increase in long-term patient capital provision. In 2018/19 we intend to nearly double our commitments, to £543m, to help innovative scaleups become the global successes of tomorrow.
Following on from our successful Business Finance Guide, which we publish jointly with the Institute of Chartered Accountants in England and Wales, this year we have been developing an innovative Information Hub – FinanceYourGrowth.co.uk – which enables growing businesses to understand and choose the best finance for their needs.
As the government’s centre of expertise on smaller business finance, this year we’ve increasingly been called on to provide research and informed analysis. This includes leading government-sponsored research into VC industry diversity and capability and how Intellectual Property might be used to secure finance.
The British Business Bank now supports smaller businesses at all stages – from startup to long-term patient capital for high-growth potential scaleup businesses. The gearing up of our delivery and capability in the last year means we are ready and able to support more UK businesses in the future, whatever opportunities and challenges may lie ahead.