British Business Bank will now lend to small and medium-sized UK businesses. The government-owned bank has announced it will expand its lending remit, after agreeing to do so via peer-to-peer (P2P) lending platform RateSetter.
While the British Business Bank’s commercial arm, British Business Bank Investments (BBBI), has been lending to sole traders and partnerships since July 2014, is it now expanding operations to include small businesses.
The BBBI has announced it will lend at the same rates as other investors, to encourage “lending to the real economy”. The commercial arm is also working to bolster the position of alternative finance solutions – such as P2P lending.
RateSetter, the London-based firm facilitating the new initiative, aims to provide loans to businesses within 48 hours. The scale-up, which has raised 5 fundraisings to date, has seen a significant increase in small business lending.
“In recent years banks have pulled the shutters down firmly on lending to small businesses” says Rhydian Lewis, RateSetter CEO and founder. “RateSetter is helping to reverse that trend and our books of loans to small businesses is growing strongly – business loans make up £137m of our outstanding loan book”.
He added “ we are very pleased that our partnership with British Business Bank Investments Ltd. has delivered finance for almost 1,000 creditworthy sole traders across the UK, and it is great news that this will now be extended to small businesses”.