the business ladder

Small businesses are to benefit from a recent project from a group of City financiers, who plan to open a new bank that lends solely to those of small scale enterprises.

Taking deposits as funding from the public, the BEB (The British Enterprise Bank) will lend exclusively to small and medium-sized companies. Plans to begin trading next year are anticipated with a £100m fundraising initiative targeting private equity companies, hedge funds and wealthy individuals over a course of eight weeks. 

Working in twenty-three branches, located primarily in various regional business parks, the lack of a high street presence will allow small scale businesses to negotiate directly with the managers, straying from practices of other new banks, such as Metro Bank.

A former senior banker at Merrill Lynch and Morgan Stanley, Jono Shorrock, is to be found on the team backing this project, quoted in the Sunday Times saying: “The plan is to actually lend to small, viable companies. Small businesses employ the most people in recoveries and this bank will help us out of the downturn.”

Recent issues of lack of funding for small businesses, and the political lobbying behind these issues, have meant that there is a great support from the lobby groups for the BEB.

Phil McCabe, a writer in the Forum of Private Business commented: “The British Enterprise Bank cannot come soon enough for many business owners in the UK struggling to access affordable finance from high street banks regardless of the viability of their companies.”

However, McCabe stressed that in order for private enterprise to advance and sustain economic recovery, traditional banks need to supply more efficient finance to their small business customers.

 

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