The British Business Bank has reaffirmed its support for Shawbrook Bank with a £10m investment in the lender’s latest £75m Tier 2 note issuance, marking the state-owned development bank’s third Tier 2 capital commitment to the specialist lender.

The investment forms part of a broader capital raise aimed at bolstering Shawbrook’s capacity to expand lending to UK small and medium-sized enterprises.

The British Business Bank’s participation follows a £30m Tier 2 subscription in 2020 and builds on a longstanding relationship that began in 2015.

The funding is designed to serve as a catalyst for further growth, allowing Shawbrook to strengthen its capital base and increase its lending activity in key specialist business markets.

The transaction also follows a £150m ENABLE Build agreement between the two organisations in 2024.

CONTINUATION

Richard Bowen, managing director of direct financial institution solutions at the British Business Bank, described the new investment as a continuation of a successful partnership.

“This £10m investment is our third Tier 2 investment in Shawbrook Bank and follows a £150m ENABLE Build transaction in 2024, extending a successful partnership since our first investment in 2015,” he said.

I am delighted to continue our work together to support diversity within the small business finance markets, helping fuel the growth of smaller businesses across the UK.”

“STRONG ENDORSEMENT”

Shawbrook’s chief financial officer, Dylan Minto, said the fresh injection of capital represented a strong endorsement of the bank’s strategy and growth plans.

He added: “We are pleased to have successfully completed the issuance of £75m Tier 2 capital, strengthening our capital base to support our growth and strategic ambitions.

“We value the continued support from British Business Bank, with their long-term participation serving as a strong endorsement of our strategy and providing the capital foundation to further grow our SME lending, supporting businesses across the UK.”

The British Business Bank has used Tier 2 capital investments selectively over the past decade to support a range of non-mainstream lenders, aiming to increase the diversity and availability of finance for UK smaller businesses. Shawbrook, with its focus on specialist markets and secured lending, has been one of the key recipients of this support.