Having first been unveiled by business secretary Vince Cable in September 2012, the business bank is set to begin operations.
The move comes as the government looks to take over lending in sectors which banks are deemed to no longer be interested in.
Cable’s new institution will bring together £1 billion of new government capital and £2.9 billion of existing capital which will work alongside private sector contributions.
However, while work will start in April, the bank itself is only expected to become a fully operational new institution in autumn 2014.
Cable says, ‘Creating a new institution is a complex and lengthy task but it is vital to get it right to stand the test of time.
‘To accelerate the process, the business bank will be set up in stages so that quick support is available to businesses. As soon as programmes are ready they will be launched and operated from the Department for Business, Innovation and Skills before being transferred to the new management in the business bank.’
More on the business bank:
- The government’s new business bank for SMEs
- Business bank could be eclipsed by pension funds for finance support
Between April and June of 2013, the business bank will launch an investment programme of £300 million, expand Business Angel Co-investment by £50 million, extend commitments to venture capital by £25 million and further the Loan Guarantee Programme in two pilots. It will also be developing a brand and consolidated marketing.
For the three months after that, the £300 million investment programme will make its first transactions there will be the beginnings of a consolidation of strategies and budgets of existing schemes.
In December, it was announced that former chief executive for the Bank of Scotland Peter Burt would chair a group tasked with advising the government on the framework of the new business bank.
That appointment was then supplemented a month later when the Business Growth Fund’s chief executive, and GrowthBusiness columnist, Stephen Welton joined Lucy Armstrong, chief executive of Alchemists, Brendan Barber, former general secretary of the TUC and Metalrax finance director Caroline Green on the panel.
Cable adds, ‘I would like to thank Sir Peter Burt and his advisory group for their ongoing help and support they have given me and my officials on determining the scope and working methods of the business bank.’
