British Business Bank launches first phase of £200m loan scheme
26th May 2016 | News
The British Business Bank has officially unveiled the first phase of its new “Help to Grow” scheme, facilitating £200m of growth loans to small businesses and help them “achieve potential”.
Originally the “Help to Grow” scheme was a pot of £100m, but Chancellor, George Osborne opted to boost the financial commitment to £200m in the latest Budget.
Individual companies will be able to secure growth loans from £500,000 to £2m, filling a much-needed gap in the market, according to Keith Morgan, CEO, British Business Bank.
“We know from our own research that 46 per cent of UK firms want to expand, yet there is a market gap for small businesses seeking finance in the £500,000 to £2m range,” said Morgan.
“This scheme has thus been designed to target that market failure in access to finance – we estimate as many as 500 businesses a year might be suitable for a growth loan.
“We hope to ensure more smaller businesses in the UK can access the finance needed to scale.”
The first phase of the scheme will see £30m of growth loans distributed through Lloyds Banking Group.
“The lending will be available to businesses across all sectors, and is expected to benefit most those with high levels of innovation and growth ambition – such as manufacturing businesses, creative industries and the technology sector,” added Morgan.
“Also, encouraging and supporting UK businesses to scale-up can be deemed an important milestone.
“We want to replicate the drive and dynamism evident in the UK’s startup culture in later stages of the small business journey, and ‘Help To Grow’ has a critical role to play in achieving that.”
There were further suggestions that the British Business Bank would be working with the European Investment Fund to secure additional support to the UK market.
Jyrki Katainen, vice-president, European Commission, said: “The EIF’s collaboration with the British Business Bank – which is supported by the Investment Plan for Europe – is very important.
“The UK is full of innovative startups and small business bosses which require a helping hand to grow their companies, and today’s news will certainly help many aspirations become a reality.”