The government has committed £442m to the British Business Bank for 2021-2022 to provide access to finance for small businesses across the UK.
The funds, excluding Covid-19 support schemes, include £56.5m to finance an expansion of the bank’s start-up loans scheme.
This will enable the bank to provide 1,000 more loans in 2021/22 than were originally funded in the March 2020 Budget to support entrepreneurs setting up businesses as part of the economic recovery.
A fifth of the loans, or 21 per cent, under this programme have been issued to ethnic minority entrepreneurs, who make up just four per cent of the small and medium-sized enterprise population.
The government has also provided the bank with the resources to commit an additional £100m to innovation and growth finance in 2021/22.
The bank said since the 2017 Patient Capital Review it has provided substantial support for innovative, high-growth businesses seeking access to long-term growth capital.
Furthermore, the government pledged a further £70m for the national security strategic investment fund. The fund supports long-term equity investment in advanced technologies which contribute to the government’s national security mission.
The government is also providing the Northern Powerhouse Investment Fund with sufficient resources to commit an additional £100m in 2021/22.
Since its launch in 2017 the fund has benefited more than 700 smaller businesses across the North West, Yorkshire and the Humber and Tees Valley regions, increasing employment, skills, turnover and investment for recipient businesses.
The British Business Bank has welcomed the government’s changes.
“The chancellor has confirmed the British Business Bank’s budgets for 2021/22, as well as announcing expansion in some areas,” said Catherine Lewis La Torre, chief executive of the British Business Bank.
“This package enables us to build on our work to date, including in response to Covid-19, so that we can continue to support smaller businesses in the UK and build the foundations for the recovery.”