The Rest Is Money 191. Is The Government’s British Business Bank Bold Enough?
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Jul 20, 2025 Stephen Welton, Chair of the British Business Bank and founder of the British Growth Fund, discusses the vital role his bank plays in supporting small enterprises. He emphasizes the need for innovative approaches to funding and explores how to keep unicorns from relocating to the U.S. The conversation also delves into rethinking pension strategies to make them more appealing to younger investors, and the importance of mobilizing pension funds for tech startups, fostering a culture of equity investing among the next generation.
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British Business Bank's Support Model
- The British Business Bank supports small businesses primarily through delivery partners, not direct lending.
- It provides guarantees and financial capacity to lenders, enhancing their ability to lend prudently to small companies.
Bank's Financial Returns and Risk
- The British Business Bank operates profitably, making returns above the government's cost of funds.
- This suggests they could afford to take more risks to support growth without jeopardizing fiscal responsibility.
Capital Boost Enables More Risk
- The British Business Bank's recent capital increase to £25 billion significantly boosts its capacity to support companies.
- This scale allows more strategic capital deployment and risk-taking to fill funding gaps in the UK economy.