The British Business Bank tripled its pre-tax profit to £426m while sending a record £9.4bn of finance to small companies, evidence shows that supporting UK SMEs is paying off for the taxpayer and the lender.
The State Borrower’s Annual Report and Accounts for 2025/26, published today, shows its biggest profit since 2021/22, up significantly from the £144m returned last year after two years of losses.
For business owners, the numbers that mean the most are sitting below the headline figure. Of the £9.4bn raised in the year, £1.3bn was publicly funded, £4.3bn was private money crowding around it, and £3.7bn came from guaranteed Bank lending.
That reached 30,000 businesses that had never received Bank funding before, and 8,000 that received follow-on funds. Especially for companies outside the capital, 87 per cent of newly supported businesses were based outside of London, and all UK states and regions are expected to see economic growth of more than £100m.
Louis Taylor, CEO of British Business Bank, said: “The Bank returned a pre-tax profit of £426m this year, which is a 3-fold increase on last year’s profit of £144m. Our operations in 2025/26 are expected to generate an impact of 39,000 additional jobs and £8.8bn of net value added over the lifetime.”
Over the life of the fund, the Bank expects £19.7bn of additional business profits, with 340,000 existing jobs supported alongside 39,000 new ones. Another £5.3bn of the £8.8bn expected total value will be generated outside London.
Guarantees are a growing part of the story. Commitments rose by 26 per cent to £2.5bn, including £1.3bn through the Growth Guarantee scheme, a scheme that gives accredited lenders a government-backed guarantee to say yes to small working businesses they might otherwise turn away. The Bank’s own analysis showed how much SME lending has changed, with challenger banks now controlling 60 per cent of the market.
The investment portfolio grew by 25 per cent to £5.8bn, split between £4.4bn of equity and £1.5bn of debt, while £115m of capital gains took the Bank’s life on investment 2.2x. Underlying operating expenses fell to 1.08 percent of assets under management, and the Bank recorded a five-year adjusted return of 3.9 percent.
The results come months into the Bank’s five-year strategic plan, which has brought in an additional £2.5bn per year of new funding commitments and £2.1bn per year of guarantees.
Stephen Welton, Chairman of the British Business Bank, said: “Through two clear lines of business, over £25bn of finance and flexibility, we are increasing access to thousands of small businesses and supporting emerging companies that thrive with equity investment. By 2030 up to 370,000 new jobs and up to £57bn of additional GVA under the Five Year Strategic Plan.”
Welton noted that the Sheffield-headquartered Bank has more than half of its staff working out of its London office, and has delivered more than £40bn of GVA and more than 250,000 additional jobs in its first decade. The full Annual Report and Accounts are available from the Bank.
For owners balancing their finances over the coming year, the message is that the taps are on, and increasingly outside the M25.
