Several issues relating to the Business Bank are listed in the Red Book, as part of the government’s efforts to ensure businesses can continue to access much-needed investment finance during the ongoing economic turbulence.
Chief among them is the Business Bank’s first published strategy, which contains an accelerated timetable for the deployment of £1 billion in capital, improvements to existing schemes, and the creation of “a lasting new institution to support SME growth by the end of 2014”.
This is accompanied by three more measures, announced in the 2013 Budget and directly relating to the Business Bank.
Firstly, a £300 million investment scheme is to be launched in the spring, to work alongside conventional investment channels to diversify the sources of lending available to small and medium-sized businesses.
Secondly, £75 million in new funding for venture capital will be introduced through the Enterprise Capital Fund, coupled with an expansion of the Business Angel Co-investment Fund for early-stage firms and start-ups.
Thirdly, the Enterprise Finance Guarantee cap introduced in 2012 will be maintained at its “generous” level, in order to support increases to SME lending; HM Treasury says £30 million of credit for SMEs is already in the pipeline from Kingfisher via the trade credit pilot scheme.
In combination, these measures all aim to provide UK small businesses with the access to credit that they need in order to expand and invest in the current climate; however, it will be the months to come that demonstrate to what extent the Business Bank will be successful.