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Business bank’s first £300m fund launched

The first phase of the Government’s business bank has been launched with a £300m fund to be invested in SMEs.

This is the first tranche of the £1bn new capital allocated for the bank, which aims to leverage at least the same amount in private sector investment.

Business Secretary, Vince Cable said: “Today’s £300 million 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.”

Hayley Conboy, CBI Principal Policy Adviser for Enterprise, said: “This fund demonstrates the Government’s commitment to supporting the financing needs of smaller and medium-sized businesses, which will help them to grow.

“It will broaden the funding options available to growing firms by boosting the alternative finance provider market. The key to the success of this and other Government finance schemes will be to raise business awareness of the initiatives available.”

Alex Jackman, head of policy at the Forum of Private Business, said: “We must also remember that the New Business Bank won’t be entirely new lending, it will consolidate existing schemes, but we welcome this early new investment nonetheless.

“There’s a pressing need to target those businesses that have viable propositions but to which the banks won’t lend for oblique credit scoring reasons.

“So overall, while we welcome this news, the overriding message has to be that this money needs to be out the door fast, and not getting jammed in it.”

Proposals from a wide range of lenders are encouraged, although the formal institution will not be operational until next year.

Those interested in submitting proposals can find more information on the gov.uk website.

This was posted in Bdaily's Members' News section by Tom Keighley .