The first £45m of Business Bank funds will be put into SME specialist lenders Praesidian Capital Europe (£30m) and BMS Finance (£15m), helping them offer a total of approximately £125m in new lending.
Cable said: “The Business Bank is designed to achieve two things. It’s partly plugging the gap that the banks have created because of the decline in bank lending to SMEs.
“It’s partly also designed to cover a longstanding British problem that ambitious growth cos find it very difficult to access long-term debt finance or equity. The Business Bank will, over the next two years, plug that gap.”
Cable added that the Business Bank’s funds were designed to be aimed at medium-sized growing businesses which have particular difficulty accessing finance.
“It’s very difficult because they’re not big enough for the stock market but they’ve run out of the kind of families and friends who help fund a startup,” he said.
Cable was speaking at the launch of Business is GREAT Britain, a BIS campaign to help ensure businesses have easy access to the information they need to grow.
In partnership with successful small businesses, including Weston’s cider and Brompton Bicycles, the campaign brings together much of the government advice available for SMEs onto one umbrella website.
Matthew Hancock, minister for skills and enterprise, said: “Government has an important role in providing a coherent package of measures to support businesses, but there is also a role for business-to-business support, with successful, growing small businesses talking to others about how exporting, hiring and business planning can take a business to the next level.”
Cable also announced a £1m fund to help businesses take advantage of mentors and £10m fund for synthetic biology companies.
He added: “Today we have set out a comprehensive package of measures that will address the concerns of small firms.
“The first investments from the British Business Bank’s investment programme will provide choice to smaller businesses looking to secure vital finance to help invest.
“Alongside cutting red tape and increasing the take up of business rate relief, government has already made significant progress in improving the business outlook for small firms and entrepreneurs.”
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