British Business Bank is seeking new SME investors

GOVERNMENT-owned British Business Bank is targeting pension funds as part of its plans to boost the amount and sources of finance available to small to medium sized enterprises (SMEs).

Canary Wharf GETTY

The British Business Bank is looking for a way to get more investors

Chief executive Keith Morgan is looking at how the development bank can get pension funds, insurers and other institutional investors to increase the amount of money available to SMEs.

He said: “We are thinking carefully about how we can get more investors into providing venture funding.”

Prior to the Business Bank’s creation in 2013, Britain was the only G7 nation without a development bank.

Along with its partners, it has helped facilitate £1.8 billion of funding to more than 43,000 small businesses across the country and Morgan expects that to rise to £10 billion within the next five years.

The majority of the money the Business Bank has helped funnel to SMEs has come from outside the big four banks, Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland.

We are thinking carefully about how we can get more investors into providing venture funding.

Keith Morgan, British Business Bank chief executive

Aside from providing loans and investing in SMEs, the Business Bank provides lenders and alternative finance providers with guarantees, boosting their capacity to lend.

The Business Bank is currently looking into the sustainability of Community Development Finance Institutions (CDFIs), organisations that offer loans to viable small businesses that are struggling to get funds from mainstream lenders.

Last year CDFIs lent £72 million to small businesses and micro enterprises, creating more than 15,000 jobs.

It will report its findings in June.

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