Jonathan Reynolds, the Secretary of State for the Department for Business and Trade recently announced that £6.6 billion of new capital is being committed by the
British Business Bank to help smaller businesses to start and scale in the UK. The background is a new £4 billion initiative — British Business Bank Industrial Strategy Growth Capital — that will be invested through the Bank’s ‘existing capabilities’ across eight growth-driving sectors, namely: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. ‘Crowding in’ is expected to raise about £12 billion of private capital.
This means British Business Bank Industrial Strategy Growth Capital will deliver around £16 billion of capital to invest in smaller businesses and innovation across these eight sectors over the next four years. As part of the Government’s Spending Review settlement, the British Business Bank will also be committing £2.6 billion of capital to support entrepreneurs, ‘wherever and whoever they are’, to access capital and thereby drive the growth of smaller businesses throughout the UK, including high-growth innovation clusters.
These developments follow the recent announcement at the Government’s Spending Review 2025 of the increase in the British Business Bank’s total financial capacity to £25.6 billion, which will enable a two-thirds increase in investments to around £2.5 billion each year and crowd in what is expected will be tens of billions of pounds of additional private capital.
Louis Taylor, the British Business Bank’s CEO, said: “We welcome the announcement by the Secretary of State to deliver British Business Bank Industrial Strategy Growth Capital, as well as the reforms to the Bank’s governance and financial framework. Using our market expertise and reach, we have a critical role to play in supporting smaller businesses in the eight growth-driving sectors to grow and stay in the UK. To deliver the Government’s growth mission it is also critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located in the UK.
“This is a strong endorsement of the Bank’s 10-year track record, market access, and capabilities, including our position as the largest investor in UK venture and venture growth capital funds and the most active late-stage investor in UK life sciences and deep tech.”
Established in November 2014, the British Business Bank is the UK Government’s economic development bank. Its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a ‘net zero’ economy, by improving access to finance for smaller businesses.