Inside a decade of the British Business Bank – how 15,000 Scottish firms thrived

A newly published impact report also reveals that 148,000 existing roles have been sustained and 11,000 additional jobs are expected to be created through bank-supported finance programmes. Scotland’s smaller businesses supported by the UK government-owned bank to date are projected to earn around £5 billion in additional turnover, equivalent to £2bn of gross value added (GVA) – a measure of net economic contribution.

The new study – “The Power of 10: 10 Year Impact Report” – has been released just over ten years on from the founding of the British Business Bank at the start of November 2014. Around 7 per cent of small firms supported by the bank’s programmes are based north of the Border – broadly in line with the nation’s share of the UK’s business population.

Underlining its contribution to long-term economic value, the bank launched its dedicated £150 million Investment Fund for Scotland in 2023 to increase the availability and supply of finance to all parts of the country. The fund offers loans ranging from £25,000 to £2m and equity investments up to £5m and has so far committed more than £10m to support businesses across Scotland.

At a UK level, the bank has delivered in excess of £32bn in combined public and private sector funding over the last decade to support around 209,000 smaller businesses, which are expected to boost economic output by as much as £43bn over the lifetime of their finance. Up to 37 per cent of the businesses supported have used finance as part of a transition to net zero, using funds to reduce their environmental impact or develop green business models.

Louis Taylor, chief executive of the British Business Bank, said: “The impact report highlights the transformative role the British Business Bank has played in driving economic growth and shaping the financial landscape for smaller businesses across Scotland over the past decade.

“From improving access to finance for entrepreneurs and creating jobs, to backing innovation and championing sustainable growth, we are proud of the impact we have achieved since 2014. Over 7,500 founders in Scotland have received support through the Start Up Loans programme, for example, providing a boost for smaller businesses in every area.

“Looking ahead, as well as removing geographical barriers, an ongoing focus is ensuring female founders and other traditionally under-represented groups can access the funding they require,” he added.

The bank is ranked as the UK’s largest domestic investor in UK venture and venture growth capital and has supported 11 per cent of all UK smaller business equity deals and with those deals accounting for 15 per cent of total smaller business equity investment over the past decade. Equity finance activity is said to have grown significantly in Scotland, with £402m deployed throughout 169 deals in 2023, including high-growth businesses in sectors such as life sciences, technology and AI.

One recent example of a company benefiting from investment is Borders-based water treatment specialist Scotmas Group, which was given a £2.2m funding boost to support its global expansion plans and create 40 jobs. The investment into Scotmas was led by the Investment Fund for Scotland, managed by Maven Capital Partners and delivered by the British Business Bank, alongside investment from Scottish Enterprise.

In addition, the impact study shows that the British Business Bank has leveraged more than £4 of private sector investment and lending guaranteed for every £1 of public funding deployed since 2014. Its network of delivery partners in Scotland, which includes banks, enterprise agencies, financial services and venture capital funds, is said to have been instrumental in addressing “structural market gaps and enabling innovation”.

Taylor added: “In 2023, we launched the £150m Investment Fund for Scotland and, over the next decade, we will see this unlock further potential and additional investment from the private sector, as well as creating more jobs. The success of Scotland’s economy relies on small businesses, with the majority of private sector firms employing fewer than 50 people, so it is crucial to ensure that the financial landscape continues to help ambitious founders to thrive.”

Scottish Secretary Ian Murray said: “Supporting jobs and business in Scotland is central to our ‘Plan for Change’ and a massive catalyst for the growth that will put more money in people’s pockets and raise living standards right across the UK.

“We want to build on the commercial and industrial success stories that have been achieved with the support of the British Business Bank, not least through our Brand Scotland campaign championing Scottish businesses around the world.”

Today’s report comes as a new survey reveals that business confidence has dipped quarter-on-quarter but remains higher in Scotland than anywhere else in the UK. Sentiment tracked by accountancy body ICAEW’s Business Confidence Monitor put confidence at 13.1 on the index, more than double its historical average and much higher than the UK reading of just 0.2.

David Bond, ICAEW director, Scotland, said: “Although business confidence in Scotland has taken a slight knock following the tax rises announced in the autumn Budget, it’s pleasing to see our companies remain optimistic for the year ahead. In particular, domestic sales and exports were strong this quarter and are expected to maintain this trend. As a result, Scottish companies are predicting the strongest rise in profits out of any UK nation or region in the year ahead.”