British Business Bank sets out case for more finance options for smaller businesses

small business finance

The British Business Bank, the UK’s national economic development bank, has today published a new report that provides a fresh analysis of the need for greater choice for the UK’s smaller businesses looking for finance to grow.

The report explains why and how the Bank works to help increase the number of providers and finance options available to smaller businesses across the UK.  That is important because there are regional imbalances in the availability and awareness of finance options amongst smaller businesses, which in turn affects the growth prospects of these businesses.  It examines the benefits of increased diversity of supply and heightened awareness of a diverse range of finance options setting out what would be important to smaller businesses in such a market.

The report asks five central questions:

Who has access?  Can smaller businesses unable to access mainstream finance options find appropriate alternatives?

Where can finance be accessed? Is the right kind of finance available in all regions, and are smaller businesses aware of their options?

When access can be arranged? Are smaller businesses able to access finance in a timely fashion?

On what terms is finance currently accessed?  Is finance available that reflects the nature and constraints of running a small business?

How is access delivered? What are the obstacles posed by the particular way a smaller business applies, receives or pays for funding?

This new report demonstrates the progress that the British Business Bank has already made against its objective, set by Government, that over three quarters of the Bank’s stock of finance is facilitated through providers other than the four largest banks. In the last financial year, 94 per cent of the finance the Bank supports was delivered by providers other than the ‘Big Four’ banks, a rise from 79 per cent in the Bank’s first year of operation.

Meeting that objective has meant that the Bank has invested substantially to back a more diverse finance market for the UK’s smaller businesses.

Keith Morgan, CEO of the British Business Bank said: “The diverse finance needs of our smaller business community are not always reflected in either the provision or take-up of available finance options, with pronounced differences seen across regions both in the supply and awareness of different finance options.

“As the UK’s national economic development bank, we were created to improve finance markets so they better serve smaller businesses across the UK, enabling them to fulfil their growth potential. We are committed to finding ways to support the market in increasing choice of both supplier and product as well as raising small business awareness of the range of finance options available.”