British Business Bank’s small business loans hit £4bn

August 26, 2026 - 03:56

The British Business Bank has reached a new milestone, confirming that its small business loan program has now distributed more than £4 billion to companies across the UK. The state-owned institution, which was set up to improve access to finance for smaller firms, says the latest figures show strong demand for its direct lending schemes, particularly among early-stage and high-growth companies that often struggle to secure funding from traditional high street banks.

However, the announcement has been overshadowed by fresh questions about the bank's internal governance. According to its most recent annual report, pay for the bank's top executives rose by nearly 12 percent last year, with the chief executive's total package now exceeding £600,000. That increase comes at a time when the bank is under growing pressure to explain how it oversees the lending decisions made by commercial banks that use its guarantees.

Critics point to a lack of transparency in the bank's underwriting process. While the British Business Bank provides guarantees to lenders, it does not directly assess the creditworthiness of every borrower. Instead, it relies on the commercial banks to follow its risk criteria. Some MPs and small business groups have argued that this arrangement has allowed some lenders to offload risk onto the state while keeping the fees for themselves, without enough independent checks.

The bank has defended its approach, saying that its framework includes regular audits and that default rates remain within expected ranges. It also notes that the £4 billion figure represents support for over 100,000 loans, many of which went to businesses that would otherwise have been turned away. Still, the combination of rising executive pay and a growing public balance sheet means the bank is likely to face more detailed questioning from parliament in the coming months.