The British Business Bank (BBB) has grown its stock of support to small- and medium-sized enterprises (SMEs) to £8bn, with most coming through alternative lenders.
The state-backed bank has revealed in its annual report, for the year to the end of March 2020, that 93 per cent of its finance was provided through alternative lenders including peer-to-peer lending platforms such as Funding Circle and Assetz Capital.
The figure is up 21 per cent from £6.6bn that was lent as of the end of March 2019.
The BBB also revealed that it has supported 98,000 businesses through its funding and guarantee programmes.
Prior to the Covid-19 pandemic, the BBB said it was on track to achieve its targeted adjusted return on average capital employed of 2.13 per cent.
But its final return is now 1.2 per cent due to valuation adjustments and expected loss provisions.
The annual report only covers the period up to the end of March so doesn’t incorporate much of the BBB’s work in facilitating state-backed emergency lending initiatives such as the coronavirus business interruption loan scheme and bounce back loans.
But the report does show that the state support it is helping manage has materially increase its operations.
Read more: BBB labelled as “not fit for purpose”
Read more: The P2P lenders offering CBILS
“As these schemes sit on the government’s balance sheet there are no specific transactions under these schemes for the bank to report,” it said.
“They have however driven a significant and material increase in the bank’s operations, with the Covid-19 schemes contributing £51.8bn at 11 August 2020 compared to £7.7bn stock of finance supported at December 31 2019, pre-crisis.”
Catherine Lewis La Torre (pictured), who replaced Keith Morgan as chief executive of the BBB this month, said its role within the UK economy has been “thrown into sharp relief as we continue to work as a trusted partner of government to create the conditions for improved access to finance that will enable smaller businesses to stabilise, prosper and grow.”
“The results reported in this set of accounts, which include our support for £8bn of finance to 98,000 businesses, demonstrate that we continue to deliver value for money to the taxpayer.”