Government-backed loans scheme has hit £1 billion worth of lending, with more than half the funding going to small businesses run by women and ethnic minorities.
The British Business Bank’s (BBB) Start Up Loans programme said it has lent more than £9,500 on average to around 105,000 businesses in over a decade since its launch.
The scheme, which has a 6% yearly interest rate fixed to its loans, gets its funding from the Government’s Department for Business and Trade, and therefore is backed by UK taxpayers.
The BBB said the programme targets underrepresented groups who are excluded from mainstream finance to help them start businesses.
To hit £1 billion worth of loans after 11 and a half years is a monumental achievement, not just for our business but for entrepreneurs up and down the country
Around £371 million worth of loans, nearly 40%, has gone to businesses founded by women.
And about 20% has been to lent to people from black, Asian and other ethnic minority backgrounds, excluding white minorities, amounting to £201 million.
The scheme is thought to be one of the UK’s most accessible lenders, with those proportions well above the level of businesses that are started by women and ethnic minorities.
Just 4% of UK’s small businesses in 2021 were majority-led by people from an ethnic minority group, and around a fifth of new businesses had female founders, according to the independent Treasury-commissioned Rose Review.
The Start Up Loans scheme, which has supported companies included nut butter brand Pip and Nut, and sportswear brand Castore, has also seen about 70% of funding go to small businesses outside London and the South East.
Richard Bearman, managing director for Start Up Loans, said: “To hit £1 billion worth of loans after 11 and a half years is a monumental achievement, not just for our business but for entrepreneurs up and down the country.
“The UK has entrepreneurs in every corner and our aim is to do even more going forward to help those that want to set up a business.”
The British Business Bank administered the Government’s Covid loan schemes to businesses during the pandemic. It came under scrutiny for the loss of an estimated £1.1 billion to fraud and error.