Business Breakfast with Keith Morgan, CEO of British Business Bank, Round-Up
Bircham Dyson Bell held a Business Breakfast with Keith Morgan, CEO of British Business Bank, on 15 June. Keith discussed the role of British Business Bank as a government-owned economic development bank and highlighted some of the topical issues it is currently dealing with.
Keith spoke about how British Business Bank (BBB) was established in 2013 under Vince Cable, then Secretary of State for Business, Innovation and Skills, with the purpose of making finance markets for smaller businesses work more effectively. He emphasised the importance of SMEs in the UK economy and explained that although the current UK market is good at supporting start-ups, it is less successful at progressing them beyond the threshold of 10 or more employees.
BBB does not lend to SMEs directly but instead works with existing financial institutions to increase access to funding, such as by providing part-guarantees for loans works. Its key aims are to increase the supply of finance in the marketplace, to create a more diverse finance market, to promote better information within the market, and to achieve this by managing taxpayers’ money efficiently with a target of a 2% return on capital employed. (Encouragingly it has met this target to date and therefore provided a positive return to taxpayers to date.) In terms of significant policy themes, BBB is currently focused on considering the UK’s relationship with the European Investment Fund (the EIF) post-Brexit, the UK’s Industrial Strategy, the role of Patient Capital Review, and the Scale Up Taskforce.
During the question and answer session, Keith was asked about a range of topics and emphasised BBB’s role in providing finance for SMEs that may not be able to obtain it otherwise. He explained how BBB was 100% Government funded which allowed the Bank to accommodate higher risk investments, such as providing start-up loans without security, and that this was particularly important in sectors where businesses may not have assets to borrow against. He also discussed BBB’s progress to date and how ‘Regionality’ is becoming increasingly important across UK policy, where there were clear disparities especially across regions especially equity finance that’s particularly important to high growth firms.