New business bank sees launch of £300m fund for SMEs

12 Apr 2013 Small and medium-sized businesses are set to benefit from £300m of finance, as the first phase of the new business bank is launched. The funds will be co-invested alongside investment from the private sector, and are intended to address long-standing gaps in the SME finance market, with the aim of increasing the diversity of debt finance by supporting smaller lenders and encouraging new entrants to the market. The funding forms part of the £1bn of new capital allocated to the business bank in Chancellor George Osborne’s 2012 Autumn Statement. Business Secretary Vince Cable said, ‘Today’s £300m boost shows we are serious about increasing competition and diversity in the business lending market. Establishing a lasting business bank institution is a long-term project, but getting this money reaching SMEs as soon as possible is the first step’. The British Chambers of Commerce (BCC) welcomed the lending boost, but urged the Government to increase the vision and scale of the business bank. Dr Adam Marshall, BCC Director of Policy, said, ‘We continue to urge ministers and the Bank of England to ‘think bigger’ when it comes to the bank’s investment capital, to ensure the bank can operate independently of Whitehall, and allow it to work directly with dynamic new and growing companies as soon as possible, and for the long term’.

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