Jessica O'ConnorThe Chancellor Rachel Reeves has unveiled a multi-billion-pound increase in Government-backed financing for British businesses following recent changes in global trade.
The package will give UK Export Finance (UKEF) the power to expand financing support for British businesses by £20bn, with small businesses also able to access loans of up to £2m through the British Business Bank’s Growth Guarantee Scheme.
Thousands of companies are expected to benefit from the move, including those directly affected by Trump’s tariff announcement.
UKEF will also offer businesses partial loan guarantees through more flexible uses of its Export Development Guarantee, helping to mitigate the impact of new tariffs and associated economic uncertainty.
Of the £80bn, up to £10bn will be allocated to ensure that businesses significantly impacted in the short term by the current situation have access to the finance they need to grow.
The British Business Bank will also expand its Growth Guarantee Scheme by £500m, which will provide vital finance for smaller businesses as they look to invest and grow.
This scheme provides the lender with a 70% government-backed guarantee against loans or other types of finance, enabling lenders to support smaller businesses that would struggle to obtain financing through traditional means – and has so far enabled more than £2.1bn of lending.
This comes on top of £1bn of funding for British Business Bank programmes for this financial year, confirmed at Autumn Budget 2024.
This includes additional support for smaller housebuilders through the ENABLE Build programme, funding for Start Up Loans and additional funding for three equity programmes supporting innovative high growth businesses
Reeves said: “The world is changing, which is why it is more important than ever to back our world-leading businesses and support them to navigate the challenges ahead.
“Today’s announcement will do that just, with thousands of businesses right across the country set to benefit.
“We are going further and faster to boost growth, but we cannot do it alone. Only by working with businesses will we achieve our Plan for Change and put more money into people’s pockets.”
Business and Trade Secretary, Jonathan Reynolds added: “Our message to British business is clear – we’ve got your back. This package, backed by the British Business Bank and UKEF, will be a crucial shot in the arm to exporters and small firms looking to trade around the world.
“Within a changing world, we need to adapt, and as part of our Plan for Change, this Government is responding. These changes will help to boost growth support jobs and supercharge thousands of businesses across all four corners of the country.”
