The British Business Bank, a state-backed entity which encourages lending to UK-based SMEs, has committed £50 million (€63 million; $82 million) to European Capital’s latest fund.
The fund, European Capital UK SME Debt, will invest in UK SMEs with turnover of up to £100 million, the BBB said in a statement. European Capital and its affiliates will match the contribution from the BBB, taking the overall fund size to £100 million.
The BBB’s total commitments to date are close to £200 million. The BBB said it expected to facilitate up to £1 billion of new lending in the UK as a result.
BBB chief executive Keith Morgan said in the statement: “This investment will deliver substantial additional funding to a much-needed area of SME financing. This is a significant investment, enabling an experienced US non-bank lender to establish a dedicated UK smaller company lending fund, bringing greater choice to the business finance market.”