British Business Bank plc is a state-owned economic development bank established by the UK Government. Its aim is to increase the supply of credit to small and medium enterprises (SMEs) as well as providing business advice services. It is structured as a public limited company and is owned by the Department for Business, Innovation and Skills (BIS). The bank has its headquarters in Sheffield.
History
The intention to create a business bank was first announced by the Secretary of State for Business, Innovation and Skills, Vince Cable, in September 2012 with an initial £1bn of government funding. The aim was to bring a number of government financial schemes, advice services and expertise together, creating a one stop shop for small and medium enterprises (SMEs) to go to. From 1 October 2013, Capital for Enterprise Limited (CfEL), BIS SME policy teams and private sector expertise were brought together within BIS to start the British Business Bank programme. On 2 December 2013 the Deputy Prime Minister, Nick Clegg, announced that the bank would be based in Sheffield, as well confirming an extra £250m of government funding. On 15 October 2014, the bank was granted state aid clearance from the EU Commission and the programme was subsequently transferred from BIS to the British Business Bank plc on 1 November 2014.
Operations
The bank has taken on all financial schemes previously controlled by Capital for Enterprise Limited (CfEL), such as Enterprise Capital Funds, the Enterprise Finance Guarantee, Business Angel Co-investment Funds and the Small Firms Loan Guarantee. In addition, the bank ran the assessment process to select Bizfitech, Funding Xchange and Funding Options as designated finance platforms for the bank referral scheme.
The business bank mainly targets its assistance to companies with a turnover of up to £25m. The bank does not lend to SMEs directly, but instead works with other financial institutions to increase access to funding, such as by providing part-guarantees for loans.
Future
The business bank came under criticism from rebuildingsociety.com for its execution of the Funding for Lending scheme, where it has created unfair competition in the UK Peer-to-peer lending industry by concentrating financial support via the largest platforms.
In March 2014 an epetition was opened to abolish the British Business Bank for inefficient use of money, however it only received seven signatures
Under her manifesto for the 2017 UK General Election, the Prime Minister announced that the Bank would take over from the European Investment Bank, after Brexit, receiving the UK funds hitherto earmarked for the European Investment Fund. The British Business Bank would open new offices in Edinburgh, Manchester, Birmingham, Cambridge, Newport, and Bristol. The manifestos of other parties have not announced any changes (in any policy area) as a result of Brexit.
References
External links
- British Business Bank official website
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