British Business Bank reaffirms support for fintech in new report
THE BRITISH Business Bank (BBB) has published a new report underlining the importance of diverse sources of funding for smaller businesses, including peer-to-peer lending.
The report, titled The Benefits of Diverse Finance Markets for Smaller Businesses, explains why and how the state-backed lender works to increase the number of providers and finance options available to small firms in the UK.
The analysis, published on Thursday, highlighted the role of fintech in “increasing competition and introducing innovative new business models to the market”.
The BBB has channelled funds through several P2P lenders, including Funding Circle, RateSetter and MarketInvoice.
“British Business Investments [the commercial arm of BBB] has been an early supporter for the nascent P2P and tech-enabled lending community,” it said in the report.
“To date £135m is committed to five fintech alternative lending partners. These partners cover a wide range of products including P2P term loans, invoice finance and merchant cash advances.”
Last November, it expanded its Enable Funding Programme to include P2P business lenders for the first time. The scheme gives lenders access to capital market funding, which means the BBB can now help P2P lenders access institutional investors’ funds.
“BBI recognises the importance of fintech in fostering innovation and enhancing competition in UK finance markets, becoming a growing source of funding for smaller business, and continues to assess opportunities in expanding our support to the sector,” it said in the report.
Looking ahead, the BBB said it will continue to grow the number and range of new delivery partners to increase the diversity of finance providers.
“The diverse finance needs of our smaller business community are not always reflected in either the provision or take-up of available finance options, with pronounced differences seen across regions both in the supply and awareness of different finance options,” said Keith Morgan, chief executive of the British Business Bank.
“As the UK’s national economic development bank, we were created to improve finance markets so they better serve smaller businesses across the UK, enabling them to fulfil their growth potential.
“We are committed to finding ways to support the market in increasing choice of both supplier and product as well as raising small business awareness of the range of finance options available.”