British Business Bank Grant Peggie Venture Capital Solutions New Forms of Funding: From Grants to Loans
Who we are An Economic Development Bank A plc 100% owned by UK Government Working with with 90 90 partners Aim to change the structure of the finance markets for smaller businesses, so they work more effectively and dynamically In turn, this will help businesses prosper and build economic activity in the UK plc since 1 November 2014 2
Our objectives 3
How we operate Expertise Designing solutions to make finance markets for small businesses work better Money 3.3bn Public funding commitments Private Sector Money Start-up funding providers Invoice Finance / Factoring Business Angels Debt funds Asset Finance providers Challenger Banks High St banks Supplychain Finance providers Venture Capital providers Peer-topeer Lenders Private Sector Money Source: British Business Bank June 2016 4
Our programmes START UP Mentoring and funds to be your own boss Start Up Loans SCALE UP Funds for high growth potential businesses Angel CoFund STAY AHEAD More funding options and choice of provider Investment Programme Venture Capital Solutions ENABLE Programmes Help to Grow Programme Enterprise Finance Guarantee Northern Powerhouse Investment Fund Midlands Engine Investment Fund Finance platforms and Credit Reference Agencies RESULTING IN INCREASED BUSINESS INVESTMENT, GROWTH AND JOBS 5
Our partners 6
Our impact Source: British Business Bank December 2015 7
What is crowdfunding Crowdfunding is an umbrella term used mainly as a grouping for online alternative finance providers. It covers a range of different models from people lending money to each other or to businesses, to people donating to specific projects, and businesses trading their invoices. The main models are a) Peer-to-Peer Lending, b) Equity-Based Crowdfunding, c) Rewards based Crowdfunding, and d) Invoice Trading Peer to Peer Lending Equity-Based Crowdfunding Reward based Crowdfunding Invoice Trading An online platform matches individuals or businesses with money to lend with individuals or businesses seeking finance In general platforms facilitate provision of unsecured debt finance Each loan tends to be made up of many small loans grouped together. An online platform facilitates the sale of a stake in a businesses to a number of retail investors in return for investment. Predominately used by earlystage firms. An online platform allows individuals to donate towards a specific project Investors will not be seeking a financial return but will be seeking a tangible reward or product at a later data in exchange for their contribution. An online platform facilitates the sale of a businesses invoices at a discount to a pool of individual or institutional investors Allows a business to access funding almost immediately, rather than having to wait for invoices to be paid.
Development of the UK Crowdfunding Market The UK Crowdfunding market is growing rapidly, albeit from a small base. Figures outlined below show the average growth rate of different types of crowdfunding between 2012 and 2014 and a breakdown of finance facilitated in 2014*. Model Finance facilitated in 2014 Average growth rate 2012-2014 Peer to Peer Business Lending 749m 250% Peer to Peer Consumer Lending 547m 108% Equity-Based Crowdfunding 84m 410% Rewards based Crowdfunding 26m 206% Invoice Trading 270m 174% * Figures taken from the NESTA Understanding Alternative Finance report 9
British Business Bank investments British Business Bank has invested 48 million (31/3/2016) across a number of Technology enabled/peer to Peer Lenders. These include: An early payment platform. A Peer-to-Peer platform lending to individuals and sole traders. An invoice trading platform. A Peer-to-Peer platform lending to businesses 10
Building awareness: The business finance guide Simple guide to finance options at each stage of business life cycle Wide range of supporters, links put in front of c.1m businesses through direct marketing and partners Re-launched June 2016 with enhanced digital content www.thebusinessfinance guide.co.uk/bbb Source: British Business Bank & ICAEW, June 2016 11
The business finance guide New digital version includes expert video content and decision making tools 12
Northern Powerhouse Investment Fund Update September 2016
Northern Powerhouse Investment Fund Update September 2016
Wider objectives of NPIF The broad objectives of NPIF as set out in the Investment Strategy are: 1. Create sustainable economic activity through supporting new and growing business 2. Build a sustainable legacy from a successful investment and lending programme 3. Have a demonstrable presence across the NPIF area linking up the finance community to increase reach and create an impact beyond the NPIF funds 15
Update on NPIF The decision of the UK to leave the European Union on the 23 June has had an impact on NPIF. However, progress is being made: 1. Completion of the OJEU Procurement process resulting in a Framework Agreement of Fund Managers in place 2. Clarity from HM Treasury on the future funding of NPIF post UK s exist from the EU 3. ERDF Grant Application submitted to DCLG and hopefully signed by end of September 2016 4. Will run mini competition to allocate funding to Fund managers by October and funding available to SMEs this year (November / December) 16
Midlands Engine Investment Fund Update September 2016 17
Wider objectives of NPIF The broad objectives of NPIF as set out in the Investment Strategy are: 1. Create sustainable economic activity through supporting new and growing business 2. Build a sustainable legacy from a successful investment and lending programme 3. Have a demonstrable presence across the NPIF area linking up the finance community to increase reach and create an impact beyond the NPIF funds 18
Update on MEIF As with NPIF the decision of the UK to leave the European Union has had an impact, but again progress is being made: 1. Strategic Oversight Board Established representing the LEPs, BBB, and HMG 2. Investment and procurement strategies agreed 3. ERDF Grant Application submitted to DCLG and hopefully signed by November 2016 4. Procurement of fund managers to start by October and funding available to SMEs early in 2017 19
Questions? 20
British Business Bank plc is a public limited company registered in England and Wales registration number 08616013, registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH. As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). British Business Bank operates under its own trading name through a number of subsidiaries, one of which is authorised and regulated by the FCA. British Business Finance Ltd (registration number 09091928), British Business Bank Investments Ltd (registration number 09091930) and British Business Financial Services Ltd (registration number 09174621) are wholly owned subsidiaries of British Business Bank plc. These companies are all registered in England and Wales, with their registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH. They are not authorised or regulated by the PRA or FCA. Capital for Enterprise Fund Managers Limited is a wholly owned subsidiary of British Business Bank plc, registered in England and Wales, registration number 06826072, registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH. It is authorised and regulated by the FCA (FRN: 496977). British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found at. BBB 011214 22