The British Business Bank released its five year strategic plan, which will see it prioritise scale-up support and take more risks in funding support.

The strategy comes after a mandate from the government to deliver a step change in how UK smaller businesses are financed.

The Bank’s overall mission is to drive economic growth by helping smaller businesses get the finance they need to start, scale, and stay in the UK.

Earlier this year, the Bank was given an increased permanent financial capacity of £25.6bn, and more flexibility to deliver.

A central tenant of the five year strategy is catalysing more capital, with the Bank aiming to increase its annual deployment by two-thirds, unlocking around £26bn of private capital alongside £13bn of its funding, and enabling up to £10bn in smaller business lending through guarantees.

The Bank will also take on additional risk, including through providing the first capital in deals that support emerging technologies where the UK can lead globally. Its greater risk appetite will be used at portfolio level to prioritise deployment to Industrial Strategy sectors.

It will target over 60% of venture and venture-growth investment towards scale-ups, with the ability to write larger cheques – over £100m – into the best growth-stage funds.

The strategy will also see the Bank make more direct investments, increasing the number and size of these investments so strategically important scale-ups can raise domestic capital and grow at home.

To unlock potential across the country, the Bank is set to deliver 85,000 new Start Up Loans and commit £150m to Community Development Finance Institutions to support underserved groups.

It will also increase regional investment and support the development of regional science and innovation clusters, new regional angel networks, and establish two new regional investment funds in the East and South East of England.

Overall, the Bank says it will reform its governance and operating model to give itself greater licence to operate flexibly, and streamline internal processes to make faster investment decisions.

Recommended reading

• British Business Bank Backs Diversity With £500M Funding Initiative
• British Business Bank Commits £15M to SME Support
• British Business Bank Invests €20M to Sustainable Innovation Growth Fund

“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,” Louis Taylor, CEO, British Business Bank, said.

“Our planned activity over the next five years is expected to fund around 180,000 businesses, support the creation of around 370,000 new jobs, crowd in £26bn of additional private capital and help deliver £68bn of benefit to the economy.”

Peter Kyle, Secretary of State for Business and Trade, said: “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, and as a result, our economy suffers.

“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.”