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Our Impact Report, published for the first time this year, sets out the impact of the British Business Bank’s activity on smaller businesses across the UK’s Nations and regions.
This inaugural impact report estimates the impact of the Bank’s activity on the UK's smaller businesses. It looks at how the Bank’s activity in 2023 has directly supported the UK economy and what impact the Bank has had in line with each of its four strategic objectives.
The analysis by objective follows the approach taken in the Bank’s 2024/25 Business Plan: All Bank activity contributes to sustainable growth and different overlapping combinations of activity contribute to backing innovation, unlocking potential and building the modern, green economy.
Driving sustainable growth
In 2023, to drive sustainable growth, the Bank took £3.5bn of taxpayer funding and unlocked an extra £2.5bn of lending and investment from the private sector. Overall last year the Bank’s programmes channelled £6.0bn of support to smaller businesses.
The Bank backed over 23,000 UK smaller businesses in 2023. It is expected that these businesses will create nearly 39,400 additional jobs over the life of the finance. The Bank has also sustained 251,400 existing jobs.
The Bank’s support is expected to increase UK turnover by an additional £19.8bn over the life of the loan or equity investment, which is equivalent to £8.4bn of additional Gross Value Added (GVA) created. Read footnote text 1
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1
GVA is the difference between the value of goods and services produced and the cost of raw materials and other inputs, which are used in production
£19.8bn
of additional business turnover
£2.5bn
Unlocks £2.5bn of private sector funding
39,400
Expected to create 39,400 additional jobs
£8.4bn
Resulting in £8.4bn additional economic activity (GVA) over the life of the finance
Backing innovation
To back innovation, the Bank took £882m of taxpayer funding and unlocked an extra £2.5bn of lending and investment from the private sector. Overall last year the Bank’s programmes channelled £3.4bn of support to the UK’s most innovative businesses.
The Bank is the largest domestic investor in the UK market, it supported 15% of UK equity deals and these deals account for 18% of total equity investment.
This funding for innovation unlocks a disproportionate amount of private sector support and hence has a disproportionately large economic impact: From 25% of the overall funding, 60% of the additional jobs created overall are linked to our support for innovation (23,800), and 65% of the expected additional turnover generated (£12.9bn). In terms of additional GVA generated, backing innovation contributes 72% of the Bank's total (£6.0bn). This is due to the funding supporting 1,400 high growth companies.
Unlocking potential
This objective has had the most public funding behind it from across the Bank. The Bank put £2.9bn of public funds into unlocking potential and secured an extra £1.5bn of lending and investment from the private sector alongside it. This meant that overall, there was £4.4bn support for the unlocking potential objective. This is expected to generate 23,300 additional jobs and £12.7bn additional turnover, which is equivalent to £5.0bn of GVA over the life of the finance.
84% of the businesses supported by the Bank in 2023 have been outside of London (19,400 businesses), and 59% of the overall additional jobs created are expected to be outside London. Similarly, 64% of the expected additional turnover gains stem from activity under this objective.
and 84%
of the businesses funded by the Bank in 2023 have been outside London
Building the modern, green economy
The Bank is currently developing proposals to support smaller businesses’ transition to net zero, but existing Bank programmes are already helping to support the move to a modern green economy.
Around 35% of the Bank’s finance drawdown, equivalent to 37% of the total number of businesses supported (8,500 businesses), is currently in part used by businesses to reduce their environmental impact in some way or support business models focused on environmental objectives. Read footnote text 2
Summary
In summary this report demonstrates that the Bank is a powerful asset for the Government. We make a tangible difference to smaller businesses that need support to startup and grow. We help smaller businesses generate more economic activity and create new jobs – while covering our costs and forecasting a return to the taxpayer. We are now looking at ways in which we can increase our impact even further, so we can best support the new Government's efforts to unlock economic growth in the years ahead.
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2
In many cases this may be a small part of the overall funding.
£8.4bn
The Bank's 2023 activities are expected to create £8.4bn of additional economic activity (GVA) over the life of the finance.
British Business Bank activities Read footnote text 3 in 2023 and their expected economic impact Read footnote text 4
Inputs
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3
excludes Investment Programme Fintech and Structured Capital and the ENABLE Build programme.
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4
The analysis includes all Bank activity for UK businesses where impact information is available. These numbers exclude Investment Programme Fintech and Structured Capital and the ENABLE Build programme. Economic impact is measured over the full life of the loan or equity investment.
£3.5bn
We deployed £3.5bn of public funding into smaller businesses
£2.5bn
with an additional £2.5bn of private sector capital leveraged alongside our own funding
Outputs
23,100
Funded 23,100 smaller businesses
84%
of businesses supported were outside London with £2.9bn of finance
18%
supporting deals which accounted for 18% of all 2023 UK smaller business equity investment
40%
of our Start Up Loans have gone to female founders
21%
of our Start Up Loans have gone to founders from Black, Asian or other Ethnic Minority backgrounds
Outcomes
35%
of finance drawdown being used to reduce environmental impact in some way or support business models focused on environmental objectives Read footnote text 5
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5
In many cases this may be a small part of the overall funding.
60%
of additional jobs created by our funding are linked to our support for innovation, although this accounts for only 25% of our total funding
4.5%
Our 5-year combined commercial and mandated adjusted rate of return
Expected long-term impacts over the life of the finance
£19.8bn
of additional business turnover
£8.4bn
Equivalent to an extra £8.4bn of Gross Value Added (GVA)
39,400
Creation of 39,400 additional jobs
Methodology
An estimate of the Bank's total impact was built from the bottom up (programme-by-programme), by looking at the Bank’s funding activity and expected economic impact for a single year cohort of UK businesses funded in 2023.
Economic impacts are modelled over time using an economic appraisal model, which has been independently verified by a third party to ensure it is fit for purpose.
Economic impacts are estimated using evidence from the Bank’s programme evaluations, monitoring information and also from analysis of company performance using Companies House data. It provides an estimate of the expected impacts on business employment and turnover over the life of the loan or equity investment, which can range between four and 10 years depending on the specific programme.
Additionality factors include finance additionality at the business level, fund level additionality if relevant, outcome additionality, and also product market displacement. All figures are presented in nominal terms.