How the British Business Bank is helping smaller businesses understand how to make business finance work for them

  • Sarah Gardiner
  • 7 February 2024
  • Blog | SME and Business Banking | Blog

At the British Business Bank we know that, for many smaller businesses, understanding the different types of financial product in the marketplace and how they could support their business can be difficult.

They may often not know where to start in a world of finance which can appear on the surface complex and challenging to navigate.

As a result, many smaller business owners turn to family or close friends for financial assistance when they are starting their finance journey, simply because they either don’t know what other options are available to them or, if they do, how to access that finance successfully.

Even if they do apply for external funding, most approach only one provider – usually their existing bank – and can be discouraged from looking elsewhere, or for an alternative form of finance, if they are turned down.  

That’s why the British Business Bank has introduced a new guide aimed at smaller businesses to help them understand how different financial products can support them at all stages of their development.

The guide, ‘Making business finance work for you’, available on the British Business Bank’s online Finance Hub, is designed to help businesses make informed choices about accessing the right type of finance.

The guide highlights the seven most common challenges businesses might face and the types of finance that could help to meet them. These include:

  • Starting a business – Starting a new business often requires capital – money that is used to help research a business idea, create a prototype product, or purchase equipment or machinery that a new business will use.
  • Research and development – Research and development (R&D) is when a business develops innovative products, services, or processes.
  • Importing and exporting goods and services – Businesses selling goods or services overseas face risks when it comes to cash flow and receiving payment from buyers.
  • Protecting cash flow and working capital – Cash flow can be unpredictable with unforeseen costs, seasonal fluctuations, and wider economic challenges all impacting business growth.
  • Debt consolidation – If a small business has multiple loans or lines of credit, they may decide to consolidate their debts into a single, more manageable loan.
  • Purchasing a major asset – If a small business is looking to acquire another business or invest in a large asset, such as specialist plant or machinery, an injection of capital may be required.
  • Scaling and growing a business – Whether it’s opening a new location, expanding product lines or increasing production capacity, growth requires capital.

A key part of the work I do in my role at the Bank as UK Network Director is to enhance and build our relationships with key smaller business access to finance stakeholders. We have produced this guide following feedback that what businesses really need is straightforward, unbiased guidance about what is available in the market for specific purposes.

Ensuring businesses across our varied Nations and regions can access finance wherever they are, and not be confined to a postcode lottery, is one of the Bank’s key objectives. We hope this guide can provide a springboard for more smaller businesses across the UK to access the funding they need to succeed and grow.

Sarah Gardiner is UK Network Insights & Strategy Director at The British Business Bank.