BBB unveils five-year plan to transform finance for smaller businesses

The British Business Bank has today published a five-year strategic plan that aims to deliver a “step change” in how smaller businesses across the UK access finance, following an updated mandate from the UK Government.

The plan sets out how the state-owned economic development bank will use its expanded capacity – including a permanent £25.6bn financial envelope granted earlier this year – to help UK firms start, scale and remain rooted in Britain.

Under the strategy, the Bank will increase its annual deployment of funding, take on more risk to support emerging technologies, make larger and more frequent direct investments, and expand its regional reach to ensure entrepreneurs nationwide can access capital.

Central to the plan is a commitment to catalyse more private investment, with the Bank expecting to unlock around £26bn in private capital alongside £13bn of its own funding over the next five years. Up to £10bn in smaller business lending is also expected to be enabled through government-backed guarantees.

The Bank said it will “take more risk”, including putting in first-round capital for deals that support emerging technologies where the UK has the potential to lead globally. Funds will also be targeted more heavily toward sectors aligned with the Government’s Industrial Strategy.

A major focus will be on scale-ups, businesses that have moved beyond the start-up phase and are primed for rapid growth. The Bank plans to channel more than 60% of its venture and venture-growth investment into these companies and will, for the first time, be able to write cheques of £100m or more into leading growth-stage funds.

It will also increase the number and value of its own direct investments to ensure strategically important scale-ups can secure domestic finance and expand within the UK.

A significant portion of the Bank’s new mandate centres on broadening access to finance across the country. Among its commitments are 85,000 new Start Up Loans over five years; £150m for Community Development Finance Institutions, aimed at underserved groups; new regional angel investment networks; support for regional science and innovation clusters; and two new regional investment funds in the East and South-East of England.

The Bank also plans structural reforms to its governance and operations, enabling faster decisions and greater flexibility.

“By 2030, our ambition is clear: a more dynamic and inclusive finance ecosystem, where innovative and ambitious companies – wherever they are based and whoever leads them – can access the capital they need not only to get started, but to scale, stay, and succeed here in the UK,” he said.

Taylor added that the Bank’s activities over the next five years are expected to support around 180,000 businesses, create 370,000 jobs, crowd in £26bn in private investment and deliver £68bn of economic benefit.

“Our small businesses have ambition and bright ideas in abundance, but too often they lack the finance they need to reach their full potential here in the UK,” he said. “This has to change and with this new 5-year plan it will.

“The Bank is increasing its pace of investment by two thirds, with a whopping £4 billion boost for the most promising businesses in our Industrial Strategy sectors, supporting tens of thousands of businesses, creating jobs, and driving growth.”

The plan aligns with the four overarching objectives set out in the Bank’s renewed mandate:

1. Support promising businesses in Industrial Strategy priority sectors to scale and stay in the UK.
2. Make finance more accessible for smaller businesses.
3. Unlock potential in people and places.
4. Mobilise institutional capital at scale.