Over the last decade, we the British public have been introduced to business funding initiative after business funding initiative. From the much-maligned Project Merlin, which sought to set targets for big four bank lending, to Nick Clegg’s pet project the Regional Growth Fund (RGF), it has been hard to keep up and determine the success of each.Then, in September 2012, chancellor George Osborne lifted the lid on the government’s latest offering – the British Business Bank (BBB). Starting out as a way of getting a select pot of government capital into the hands of small business owners and operators, the BBB is now responsible for all of the Department for Business, Innovation & Skill’s direct finance schemes. It has been spearheaded by business secretary Vince Cable, a politician who has more experience than most in the government when it comes to running a business. Through visiting the London base of the organisation, we met with its head Keith Morgan and discovered its four key objectives.
Number one is to increase the supply of finance where the market is seemingly not working – targeting areas in need. Next on the list is a desire to increase the diversity and choice of the market. Third on the list is described as an “efficient finance market”. To do this, and understand the state of affairs, the BBB put together its “Business Finance Guide” alongside a host of other vested players. This common, and not fragmented, voice is key, said Morgan. The last point comes back to accountability. As the BBB is using taxpayers money, it must use it well and produce a return of said capital over time. Recent, and set to be yearly, research carried out by the BBB shed some light on the lack of knowledge some small business owners have when it comes to alternative forms of finance. The three most well-known forms of finance were credit cards, leasing/hire purchase and government/local authority grants. At the other end of the scale, only 15 per cent know of mezzanine finance – with crowdfunding and export finance also propping up the table. Read more about the BBB:
- British Business Bank chief: UK can steal a march with fintech
- Government’s Business Bank invests £40m in P2P lending provider Funding Circle
- British Business Bank not living up to expectation
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