British Business Bank welcomes £6.5bn SME finance boost from Government

The British Business Bank has unveiled a significant package of measures designed to improve access to finance for smaller businesses, including a £6.5 billion expansion of its flagship Growth Guarantee Scheme, enhanced support for intellectual property-rich firms, new export finance initiatives and additional funding for community lenders.

The measures, announced ahead of the Chancellor’s Mansion House speech, form part of the Government’s wider strategy to boost economic growth by improving access to finance for SMEs across the UK.

At the heart of the package is a £6.5 billion uplift to the British Business Bank’s Growth Guarantee Scheme (GGS), which is expected to unlock an additional £6.5 billion of lending over the next four years and support around 33,000 businesses across the UK’s nations and regions.

Since its launch, the scheme has delivered £3.7 billion of finance through 70 accredited lenders, with around 70% of facilities supporting businesses outside London and the South East.

The expansion will also make the scheme more flexible, extending some facility terms from six to ten years while increasing the turnover eligibility threshold from £45 million to £54 million, allowing a wider range of scaling businesses to benefit.

Alongside the expansion, the British Business Bank is strengthening support for community finance providers that serve businesses often overlooked by mainstream lenders.

The Bank confirmed that its Community ENABLE Funding programme remains on course to commit at least £150 million to Community Development Finance Institutions (CDFIs) this financial year and announced the accreditation of SWIG Finance as the programme’s seventh lender. SWIG Finance has been allocated £17.5 million to support smaller businesses across the South West of England.

Looking further ahead, discussions will begin later this year on attracting private capital into the programme, with ambitions to support up to £1 billion of additional community lending.

The package also targets one of the long-standing challenges facing innovative businesses by making up to £500 million of ENABLE Guarantee capacity available over the next 12 months for intellectual property-rich SMEs.

The initiative aims to help businesses whose value lies primarily in patents, software, trademarks, designs and other intangible assets secure debt finance despite having limited physical collateral. The Bank expects the programme to increase lender confidence, improve pricing and strengthen the market’s ability to assess IP-based business models.

Supporting Britain’s exporters is another key element of the announcement.

The British Business Bank and UK Export Finance will jointly launch a new export finance scheme in spring 2027, designed to improve access to working capital and growth finance for smaller businesses already exporting or looking to enter international markets.

The scheme will use UK Export Finance guarantees on eligible lending portfolios to encourage lenders to provide more scalable cash lending facilities while retaining a proportion of the lending risk.

“The British Business Bank’s Growth Guarantee Scheme has a strong track record of enabling business growth, and the additional capacity and greater flexibility provided will help even more businesses, including those served by community lenders, to invest, grow and create additional jobs.

“It is great to be collaborating with UK Export Finance to help smaller businesses to export. This has the potential to transform UK economic performance and international competitiveness. Both these schemes, alongside the additional support for IP-rich businesses, will make a real difference on the ground, providing the finance needed for UK smaller businesses to realise their full potential.”

Chancellor Rachel Reeves said the reforms represented one of the most significant packages of support for smaller businesses in recent years.

“Our plan for the economy has put Britain on a stronger footing – restoring stability, getting investment flowing, and delivering reform,” she said.

“We know that small businesses are the backbone of this economy, and for too long they have heard ‘no’ when trying to raise the funds they need to grow and create jobs across the UK.

“When they succeed, we all succeed, and today’s major package of reforms is the most significant step in years to unleash their potential.”

“Today we’re putting our weight behind Britain’s entrepreneurs and innovators, unlocking billions in additional lending to help thousands more small businesses start, scale and succeed because access to finance should never be the barrier between a good idea becoming a great British business,” he said.

Kanishka Narayan, Minister for AI and Intellectual Property, welcomed the focus on IP-backed lending, describing intellectual property as “one of the most valuable but underleveraged assets on a company’s balance sheet.”

He added that the British Business Bank’s commitment could help move IP-backed lending “from the margins to the mainstream.”

Tim Reid, CEO of UK Export Finance, said the new partnership would help more SMEs unlock international growth opportunities.

“UK Export Finance exists to ensure no viable UK export fails for lack of finance, and this new joint scheme with the British Business Bank is a significant step towards furthering this mission,” he said.

Industry bodies also welcomed the package.

“Access to finance is a fundamental need for small businesses looking to grow, so we are pleased to see our calls to amp up the British Business Bank’s Growth Guarantee scheme have been heard. Expanding resources and extending payment terms will help small businesses build wealth in every part of the country.

“Small firms need as many finance options available to them as possible right now. Removing the barriers which currently restrict building societies’ loans to small firms, and widening export finance to include a portfolio guarantee, will help ambitious businesses and entrepreneurs enter new markets, and grow and succeed. Altogether, the package of reforms announced will help small businesses to fund their dreams of expansion, helping to nurture economic growth across the UK.”

“The FLA has been clear that if the UK is serious about growth, it must back the lenders that back SMEs. Government-backed guarantees give lenders the confidence to support viable businesses that want to invest, scale up and create jobs. The expansion of the Growth Guarantee Scheme, longer facility terms and broader eligibility are therefore important and welcome steps.

“The priority now must be delivery. We look forward to working with government, the British Business Bank and our members to ensure this support reaches SMEs quickly and has maximum impact.”

David Postings, Chief Executive of UK Finance, said the announcement reflected long-standing calls from the banking industry.

“The expansion of the Growth Guarantee Scheme, alongside the wider support for innovative firms and exporters, is very welcome news and reflects calls made by UK Finance and our members,” he said. “These businesses are vital to the UK economy, and the changes will unlock billions in additional lending capacity to support their growth.”

“Many great businesses struggle to get the funding they need, so Community Development Finance Institutions are a lifeline,” she said. “This fantastic news will mean CDFIs can support more small businesses, so entrepreneurs can get the right finance at the right time and grow economies across the UK.”