New £40 million investment by British Business Bank to support £450 million of lending to smaller businesses
The British Business Bank programme confirmed that it is making a new £40 million investment to support further lending to smaller businesses through peer-to-peer lender Funding Circle. This investment will start on 1 March 2014 and is expected to support around £450 million of lending over the next 18 months.
This builds on an earlier investment of £20 million in Funding Circle in December 2012 through the Business Finance Partnership (BFP), a scheme which led to the current Business Bank Investment Programme. That funding has resulted in £130 million being lent to small and medium-sized enterprises (SMEs) through Funding Circle, including:
- Bramley & Gage, a manufacturer of gin and fruit liqueurs, borrowed £25,000 from 248 people in the UK including the government, to purchase a new gin still to increase production
- Moo Free Chocolate, a manufacturer of dairy free and gluten free chocolate, borrowed £60,000 to purchase machinery and ingredients to increase production
- Kaizen, a luxury furniture manufacturer, borrowed £100,000 to expand and fuel growth
Business Secretary Vince Cable says too much business lending is concentrated in the big banks: “If we’re to have a properly functioning business lending market, they need to be challenged by new banks, peer-to-peer lenders and other alternative providers.”
Peter Wilson, Managing Director of the British Business Bank’s Investment Programme says the pace is really starting to build in terms of the momentum of our commitments and the impact that our Investment Programmes are making: “The pipeline of future commitments is strong and we are seeing continuing interest through new applications to the programme.”
To date, total commitments made under the current Investment Programme stand at £85 million, which together will help to support over £550 million of new lending capacity for smaller businesses. The £87 million allocated under the Business Finance Partnership forerunner of the Investment Programme has already supported almost £200 million of lending to smaller businesses. A total of 10 alternative lenders have so far been supported through these schemes.
