Business Bank investment funding launched

The first round of funding for the investment arm of the Government's Business Bank, designed to stimulate the flow of finance to small businesses, has been announced by the Business Secretary Vince Cable.

Outlined in the 2012 Autumn Statement, the Business Bank will consolidate a number of existing finance schemes for SMEs. It will also fund the provision of advice and support for businesses to start-up and grow.

The Bank's £300 million investment programme will allocate funds to existing lenders and specialist finance companies, which will then provide debt finance to SMEs.

The first wave of funding for the investment programme amounts to £45 million, of which:

  • £30 million will be allocated to Praesidian Capital Europe; and
  • £15 million will go to BMS Finance, which has a focus on SMEs with high growth potential and those nearing profitability.

Both funds are expected to start lending to SMEs in early 2014.

Announcing the funds, the Business Secretary Vince Cable said: "The first investments from the British Business Bank's investment programme will provide choice to smaller businesses looking to secure vital finance to help invest."

Mr Cable also announced a new £1 million business-to-business mentoring campaign and a £10 million start-up fund for entrepreneurs in the synthetic biology market.

The Skills and Enterprise Minister Matthew Hancock said: "Government has an important role in providing a coherent package of measures to support businesses, but there is also a role for business-to-business support, with successful, growing small businesses talking to others about how exporting, hiring and business planning can take a business to the next level."