The British Business Bank (BBB), a state-owned economic development bank, has agreed to a £100m guarantee facility with specialist business lender Cambridge & Counties Bank through its ENABLE Guarantee scheme.

The agreement builds on a separate facility secured in May 2018, which the bank has used to help a range of UK businesses over the past five years – and is offered with the option of extending this to £150m in the future.

The ENABLE Guarantee programme is designed to encourage banks and other lenders to increase their lending to smaller businesses by reducing the amount of capital or junior funding required for such lending.

British Business Bank (BBB)

Under an ENABLE Guarantee, the UK Government assumes a portion of the risk on a portfolio of loans to smaller businesses, in return for a fee. When working with non-bank financial institutions, this risk portion typically aligns with any senior funder.

The latest facility will allow the Leicester-based bank, which is jointly owned by Trinity Hall, a college of the University of Cambridge, and the Cambridgeshire Local Government Pension Fund, to lend additional amounts to smaller businesses over and above its long-established, pan-UK lending programme.

Launched in 2012, the bank services the small business market with manually underwritten focused products in real estate and asset finance.

Despite the significant economic headwinds in 2022, Cambridge & Counties Bank saw the value of loans to its clients reach a record last year, with growth driven by demand for its competitive, tailored lending solutions.

An important element of its recent growth and success has been a recognition of the importance of environmental, social and governance (ESG) standards and reporting.

The bank achieved a net zero carbon rating in 2019 and has retained that rating since, as it remains at the forefront of the industry drive towards a more sustainable future.

This transaction will also include support for small business residential landlords who want to improve the Energy Performance Certificate ratings of properties through measures such as effective insulation. The focus is closely aligned with the BBB ’s objective of supporting the UK’s transition to a net zero economy.

Reinald de Monchy, managing director, guarantee and wholesale solutions, at the BBB, said: “As well as fitting well with the British Business Bank’s objective of supporting the UK’s transition to a net zero economy, this will also support tenants at a time when their energy bills are a top priority for them.”

Mike Hudson, chief risk officer at Cambridge & Counties Bank, said: “As sustainability and related issues have risen up the corporate agenda, including at Cambridge & Counties Bank, we are highly supportive of its ambition to help businesses transition to net zero.”

PEAC Solutions partners with Canadian Armada Credit Group