An investment programme, inviting investment proposals to support lending to small and medium-sized enterprises (SMEs).
The British Business Bank Investment Programme, which builds on the Business Finance Partnership, was launched on 10 April 2013 by Vince Cable, Secretary of State for Business, Innovation and Skills (BIS).
The Programme is investing £400 million alongside private investors to address long-standing gaps in the SME finance market by promoting greater choice in the supply of lending to SMEs.
The Programme has already made 5 commitments totalling £108 million.
We continue to welcome new applications. Please see our How to apply section for details on the application process.
Investment Programme objectives
The Investment Programme will invest in those new and established lending channels best able to meet 4 key objectives:
- increase the number of debt finance markets available to SMEs
- mobilise new funding from private sector sources to support lending to SMEs
- channel finance to SMEs in an effective, appropriate and responsible manner
- expand the total amount and / or types of debt funding available to SMEs
These objectives are closely aligned to the goals of the British Business Bank, which currently operates as a programme within BIS.
Types of investment government will make
Investments will be made across a wide range of lending channels and lending products. This will ensure that government promotes diversity of supply of lending to SMEs. These types of investment could include:
- equity, equity-like and debt instruments in financial institutions
- debt funds or asset backed lenders that lend directly to businesses
- non-bank channels, such as supply chain finance, peer-to-peer lending and other lending platforms
Proposals will fall into 2 categories: Managed Investments or Direct Capital Investments:
- Managed Investments: investment, alongside the private sector, into managed lending funds, or other managed lending vehicles that on-lend funds directly to SME borrowers
- Direct Capital Investment: investments, alongside the private sector, either by way of equity or debt injection into lending businesses able to use these commitments to increase their lending activity
Who can apply
We welcome proposals from lenders who meet the following 9 investment criteria:
- those whose focus is to provide lending to viable businesses operating in the UK with turnover of up to £100 million
- have a strategy based on the provision of debt finance, or debt-like finance where the majority of returns are debt-based
- seek an amount of investment from government of between £10 million and £100 million
- lend funds to SMEs within 3 years of government’s commitment, with preference for lending activity to commence by the end of 2014
- generate commercial returns, with government investing on terms and with a return and level of risk that would also be attractive to private sector investors
- seek no more than 50% of their total investment requirement from government
- make sure that government will invest on equal terms with private sector investors (eg generate the same net return and share the same level of risk as private sector investors)
- show they have a competent team, with enough expertise to carry out the proposal’s investment strategy
- show transparent and appropriate investment, regulatory and tax structures
How to apply
The application process is currently open. The programme will remain open for new applications until the funds allocated to the programme, currently £400 million, are fully committed.
There are differences in the application process between Managed Investments and Direct Capital Investments. When you complete your application we therefore strongly advise that you refer to the following:
- ‘Investment Programme: request for proposal for Managed Investments’
- ‘Investment Programme: guidance document for Direct Capital Investments’
These provide detailed information about the application and assessment processes, deadlines for submitting proposals and addresses which applicants should use to submit proposals.
To request a copy of either of these documents in another format (eg Braille) please contact the investment programme team on firstname.lastname@example.org.
If you are uncertain about which category your proposal falls into, after having read the request for proposals and the guidance document, please email: email@example.com.
A series of information sessions for prospective Investment Programme applicants were held in April 2013 and early May 2013. The sessions were for information only. You do not need to have attended a session to submit a proposal to the Investment Programme.
The presentation from the information sessions is available below, revised to reflect the extended time frames. For the latest timetable please see the ‘Investment Programme: request for proposal for Managed Investments’ or the ‘Investment Programme: guidance document for Direct Capital Investments’’ under the How to apply section.
If you have any questions in advance of submitting a proposal, please email the Investment Programme team.
All potential applicants have access to the same information that we have published in the latest.
How to find out more
If you have any queries about the Investment Programme, please email:firstname.lastname@example.org.
British Business Bank
The British Business Bank will support economic growth by bringing together public and private sector funds to create more effective and efficient finance markets for smaller and medium-sized UK businesses. It is a key element of the government’s Industrial Strategy, and its programme is already contributing to making the UK the best place in Europe to start, grow and finance a business.
The British Business Bank programme is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. British Business Bank plc will operate as a government-owned financial institution once the government has received European Commission state aid clearance, which is expected in 2014.