Press release

New initiative to unlock £100m of finance for regional businesses

Nick Clegg announces that up to £50 million will be available for regionally-focused business lenders through the British Business Bank.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


Six years on from the financial crisis, whilst conditions are improving, small businesses can still face barriers when borrowing the money they need to grow. Businesses who can’t get the financial help they need too often find their success stifled.

This is compounded by a dearth of lenders outside of London and the south-east, once again accentuating the north-south divide. Nationally, more than half of small businesses said availability of credit was ‘poor’ or ‘very poor’. (Source: FSB). That is why government established the British Business Bank.

With an urgent need for local lenders to be given the capital to lend more to local businesses, the Deputy Prime Minister is today announcing the availability of up to £50 million for regionally-focused business lenders through the British Business Bank.

The initiative will ensure big banks aren’t monopolising lending and will help regional small businesses grow by funnelling more finance through local commercial lenders.

Deputy Prime Minister Nick Clegg said:

Britain’s economy isn’t built solely around big business. In fact, smaller businesses represent 99% of all businesses in the UK. Therefore recognising and supporting this country’s smaller businesses to succeed is integral to strengthening our economy whilst building a fairer society. I’m pleased to be unlocking this funding to ensure thousands of businesses aren’t held back by their size or location, helping smaller enterprises based outside of our capital city to grow, thrive and compete in the market.

About the Business Bank and regional lending initiative

This government is determined to help small businesses who have struggled to get loans in the tough economic climate. The British Business Bank was set up by the government to get money flowing to small businesses as fast as possible to help them expand. Without the funding they need, businesses can’t grow and our recovery slows down.

That’s why we are empowering small business owners who want to expand but haven’t been able to because of a lack of finance. The British Business Bank aims to ensure they have a broader range of options, including by providing money to local lenders.

The British Business Bank is making up to £50 million available to regionally-focused commercial lenders.

Through private-sector match-funding this is expected to unlock up to £100 million of new lending for regional businesses through the likes of local banks and debt funds.

How it works

Up to £50 million will be available to any established commercial lender that currently has - or is prepared to open - an office outside of London and the south east to serve the regional business community.

Applicants would be provided with a dedicated contact in the Investment Programme Assessment Team.

Networking events will be held with financial providers to promote the initiative.

There is a minimum desired commitment per bid of £10 million, which will need to be matched by at least as much private commercial funding

The funding is part of the £400 million made available to the British Business Bank Investment Programme.


A number of independent reports have suggested a sizeable funding gap between demand for finance and supply.

This government has put in place a number of measures such as Funding for Lending and the British Business Bank to increase the flow of credit to small business. However, access to finance continues to be cited as a barrier to growth in a number of surveys.

This challenge is compounded by the fact that UK businesses rely on a very small number of banks for the finance they are looking for. This is even more the case for those firms located outside of the south east who feel particularly underserved by the finance providers local to them. Earlier this month, the Competition and Markets Authority launched a full investigation into competition in banking including business lending.

Regional benefits

Over the past year (October 2013-September 2014), the British Business Bank has already facilitated finance for over 21,000 small businesses across the UK, to the value of nearly £1.5 billion. Regionally, this equates to:

Region Finance
East Midlands £102 million to 1,413 businesses
East England £83 million to 1,495 businesses
London £346 million to 4,291 businesses
North-east £64 million to 959 businesses
North-west £202 million to 2,892 businesses
South-east (excluding London) £230 million to 2,145 businesses
South-west £79 million to 1,627 businesses
West Midlands £59 million to 1,795 businesses
Yorkshire and Humber £151 million to 1,754 businesses
Published 22 December 2014