By Daniel Hunter

The British Business Bank has announced that it is opening its ENABLE Guarantee programme to all banks that lend to smaller UK businesses following completion of its scheme's first transaction.

The ENABLE Guarantees programme encourages participating banks to lend more to smaller businesses by reducing the capital they need to hold to support such lending.

The first transaction, with Clydesdale and Yorkshire Banks, will support £125m of new lending to smaller businesses - of which at least £50m will go to products and industry segments the bank have not previously covered.

These areas include: Cash Flow Lending specifically for SMEs, Automotive Tooling Finance, creating an Emerging Technology Lending Unit and introducing a new Renewables Finance offering. The remainder will enable additional lending in areas where Clydesdale and Yorkshire Banks are already active.

Vince Cable, Secretary of State for Business, Innovation and Skills said: “I set up the British Business Bank to give small businesses access to alternative finance schemes that were badly needed. It is delivering and is supporting £1.8 billion of finance to over 43,000 smaller businesses.

“This new guarantee programme will make it easier for challenger banks to lend to small businesses and help to accelerate the transformation of UK banking into a more dynamic and competitive marketplace.”

Keith Morgan, CEO of the British Business Bank said: “Our ENABLE programme represents a significant scaling up of our firepower in making finance markets work better. The funding unlocked by the programme will make a real difference to smaller UK businesses.”

“We welcome the additional lending and choice of products that Clydesdale and Yorkshire Banks will bring to the market under this first transaction.”

Paul Shephard, Director, Business and Private Banking at Clydesdale and Yorkshire Banks, said: “SMEs play a crucial role in a successful economy and we're delighted to be joining forces with the British Business Bank to help more business owners achieve their growth aspirations. This new partnership will help us increase our support for SMEs and further expand our existing challenger presence in the SME market.

“Clydesdale and Yorkshire Banks have a long history of assisting SMEs through our full service offering. Our size and structure allows us to provide businesses with a very flexible and responsive approach to banking which we're demonstrating with the launch of this new initiative.”