Friday, October 22, 2021

British Business Bank managing £89bn, supporting 1.77m businesses – report

The British Business Bank has released its 2021 report revealing that the Sheffield-headquartered bank is managing £89 billion of finance support to 1.77 million businesses.

“Throughout 2020/21, in response to the pandemic the British Business Bank performed a role vital to the UK government, finance markets and the economy as a whole,” said Catherine Lewis La Torre, CEO of British Business Bank.

“Our financial support to smaller businesses has increased by more than £80bn during the last financial year, and now stands at nearly £89 billion.

“We look forward to using our unique position in the market to support businesses further as they recover and return to growth once more, thereby rebuilding the foundations of the UK’s future prosperity.”

The Bank’s performance against its six objectives in the last financial year was as follows:

Increasing the supply of finance to smaller businesses

The stock of finance supported through the Bank’s core finance programmes was £8.506 billion at the end of March 2021. This was below its target of £9.085 billion due to displacement of existing programmes by COVID-19 emergency finance schemes. These offered £80.4 billion of finance to almost 1.7 million businesses. This emergency support, which is not included under the Bank’s core programmes, was evenly distributed across the Nations and regions of the UK.

Helping create a more diverse finance market for smaller businesses

94.5% of the finance supported by the Bank’s core finance programmes in 2020/21 was delivered through smaller, newer or alternative finance providers, exceeding its 94.0% target.

Identifying and helping to reduce regional imbalances in access to finance

The Bank’s flow of gross deployment outside of London was £943 million, over 8% above its target of £868 million. The Bank announced 78 new delivery partners across its programmes, bringing the total number of providers it was working with to 218 at the end of March 2021.

Encouraging and enabling SMEs to seek the finance best suited to their needs

Prompted awareness of the Bank amongst SMEs surveyed was 25%, meeting the target set. 41% of SMEs surveyed said they would consider contacting the Bank for information about finance, marginally below the target of 42%.

Being the centre of expertise on smaller business finance in the UK, providing advice and support to the Government

The Bank was independently assessed as having deployed its expertise to government effectively, ranging from advice on COVID-19 scheme development and delivery to fulfilling priorities on research and market engagement. The Bank published six major reports, including Alone, together: Entrepreneurship and diversity in the UK.

Achieving its other objectives while managing taxpayers’ money efficiently

The Bank achieved an adjusted return of 14.6%, significantly exceeding its 0.10% target. This was driven by the generally strong performance of equity finance markets in 2020/21.

Core programme highlights

  • The Start Up Loans programme had a record year, providing over 11,000 loans – a year-on-year increase of over 30%
  • The Bank’s regional funds – the Northern Powerhouse, Midlands Engine and Cornwall and Isles of Scilly Investment Funds – provided a £357m flow of finance into their regional finance markets in 2020/21.
  • The Regional Angels and Enterprise Capital Funds programmes made combined total commitments of £100m to support seed and early stage equity funding for high-growth businesses.

Revised mission and new climate change objective

In this year’s report the Bank also announces a revised mission and a new climate change objective:

Revised mission – ‘To drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy, by improving access to finance for smaller businesses.’

New climate change objective – ‘To support the UK’s transition to a net zero economy.’

These changes reflect the Bank’s commitment to playing an active role in driving a more sustainable economy.

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