British Business Banks lends £368 million to manufacturers

The British Business Bank has reached the landmark milestone of more than £368 million in lending to the manufacturing sector through its Growth Guarantee Scheme. In total, the scheme has delivered more than £2.5 billion in lending to smaller businesses across the UK since its launch in July 2024. Over 1,900 smaller businesses in the UK’s manufacturing sector have benefitted from lending through the Growth Guarantee Scheme, which is designed to support access to finance for businesses as they look to invest, grow and create jobs.

Today’s milestone follows the Government’s recent announcement of a new £4 billion initiative, British Business Bank Industrial Strategy Growth Capital, which will be invested through the Bank’s existing capabilities across the eight growth-driving sectors of the Industrial Strategy, which includes manufacturing. The Growth Guarantee Scheme has supported over 20 different business sectors across the UK, including over £440 million to construction and real estate, more than £366 million to wholesale and retail, and £200 million to professional services firms.

Of the £2.5 billion total, over £630 million (27%) of lending has been provided to companies under five years old, underlining the critical role of the Bank in driving growth for start-up and scale-up businesses. In addition, 16% of this total was also provided to the manufacturing sector as well. 69% of lending through the scheme has reached businesses outside of London and the South East. The North West, West Midlands, East of England and Yorkshire and The Humber regions have each received more than £200 million in lending through the scheme.

Government-backed guarantee
The Growth Guarantee Scheme launched on 1 July 2024, with a wide range of products supported by a broad variety of accredited lenders, including term loans, overdrafts, asset finance, invoice finance and asset-based lending. The scheme can support facility sizes of up to £2 million and provides the lender with a 70% Government-backed guarantee. Businesses can use the finance for any legitimate purpose, including managing cashflow and investment, however, businesses must be able to afford to take out additional debt finance for these purposes and the borrower always remains 100% liable for the debt.

Rachel Reeves, Chancellor of the Exchequer, said: “The Growth Guarantee Scheme has made a huge impact on our regional economies, helping smaller businesses across the UK to invest and grow, creating jobs and putting more money in people’s pockets. The British Business Bank’s mission to support the financing needs of smaller businesses is vital to our Plan for Change growth mission which is why we increased its firepower by two-thirds at the Spending Review.”

Gareth Thomas, Minister for Small Business, said: “As part of our Plan for Change we are committed to breaking down the barriers SMEs face when starting and scaling up, to create jobs and further boost the economy. This is an important milestone for the Growth Guarantee Scheme which plays a key role in helping us achieve this, by providing vital access to finance for smaller businesses right across the UK.”

Reinald de Monchy, chief banking officer, British Business Bank, said: “This milestone is a demonstration of the important work done by the 50-plus delivery partners who have signed up to the Growth Guarantee Scheme, since its launch in July 2024. In particular, the manufacturing sector is leading the way in accessing our support and driving economic growth across the UK. Thanks to the Government’s recent Spending Review, the British Business Bank is poised to continue and expand on our support for the manufacturing sector, driving economic growth across the industry and country.”

Creating high-value jobs
Seamus Nevin, chief economist at Make UK, said: “Access to finance is vital to ensuring the success of the UK’s industrial strategy and future economic growth but many manufacturers, especially SMEs, can struggle to get the supports they need. This milestone shows just how powerful the Growth Guarantee Scheme can be in helping smaller manufacturers, and especially those outside London and the South East, to invest, scale, and create high-value jobs across the UK.”

He continued: “At a time when the manufacturing sector is driving innovation, the ‘net zero’ transition, and global competitiveness, this kind of targeted support is essential. Continued backing from the British Business Bank, and the new Industrial Strategy Growth Capital programme, will be key to unlocking long-term economic growth and ensuring the UK remains a world leader in advanced manufacturing.”

Tina McKenzie, policy chair at the Federation of Small Businesses (FSB), commented: “FSB campaigned for the Growth Guarantee Scheme to be created, and so we are pleased to see this latest lending record, which shows just how vital the Scheme has been to so many small businesses up and down the country. As the UK’s grassroots business network, we particularly welcome how the funding has been spread right across all the regions and nations, unlocking wealth and job creation in FSB members and others in local communities’

She concluded: “Small firms will be the engine of future economic growth, so getting them the finance they need is key. The Growth Guarantee Scheme reaches promising businesses which might otherwise not be able to turn their business plan into reality.”